What is Eigenpie (EGP)?

Introduction

The growing popularity of decentralized finance (DeFi) has necessitated the innovation of advanced protocols to strengthen the security and functionalities of products built on the Ethereum blockchain. To bridge this gap, Magpie has developed a solution that can seamlessly integrate with EigenLayer, the foundational pillar for liquid restaking. This solution, termed Eigenpie, is aimed at enhancing the security and evolution of all applications built on the Ethereum blockchain, allowing users to restake their Ether (ETH) positions and earn passive income. Eigenpie is thereby redefining the possibilities within the DeFi space while forging new opportunities for users and the Ethereum blockchain community.

In this article, we will take a comprehensive overview of Eigenpie, exploring the core concept of liquid restaking and how Eigenpie is positioned to redefine liquid restaking on the Ethereum blockchain.

Understanding Ethereum Restaking

Since the inception of blockchain technology, crypto-economic security has been a fundamental challenge. From Bitcoin to Ethereum to other iterations of layer 1 solutions, establishing robust crypto-economic security has been a bottleneck riddled with tradeoffs. Being the leading smart contract blockchain, this challenge is particularly true with Ethereum since middleware and non-EVM (Ethereum Virtual Machine) applications built on the blockchain network are responsible for generating their own trust network. As more applications are built on the Ethereum network, the crypto-economic security becomes more fragmented, and there is an urgent need for a solution.

EigenLayer has emerged as a pioneering solution that embodies a protocol that extends the crypto-economic security strengths of Ethereum to non-EVM applications via a staking mechanism.

What is EigenLayer?

Source: Medium.com/@Magpie

EigenLayer is an Ethereum-based restaking protocol that enables the rehypothecation of ETH on the consensus layer. In simpler terms, it uses a restaking mechanism to allow ETH stakers to reallocate their staked ETH to enhance the crypto-economic security of other protocols. Restakers on EigenLayer earn extra rewards while the protocols enjoy access to the already established crypto-economic strength of the Ethereum network.

EigenLayer materializes decentralized trust by allowing non-EVM applications and middleware protocols to leverage Ethereum’s highly secure trust network. This decreases the costs of launching protocols since developers will not need to spend exorbitant amounts on establishing network security, allowing them to focus on creating a quality application.

How Does EigenLayer Work?

EigenLayer allows users that staked ETH to repurpose their locked ETH to preserve the crypto-economic security of other applications built on top of the Ethereum network. Users can opt into EigenLayer and agree to grant additional enforcement rights on their staked ETH. This creates additional slashing conditions to meet the conditions of projects, such as data availability layers and bridges. The slashing conditions enforce honesty among the participants and augment the security of the applications utilizing EigenLayer.

Types of Restaking on EigenLayer

Users can choose either the native restaking or liquid restaking feature on EigenLayer. Let’s explore each:

Native Restaking

To participate in native restaking on EigenLayer, users must operate the Ethereum Validator Node. The Ethereum validator node’s credentials are tied to EigenPod, the protocol’s smart contract.

Liquid Restaking

Users can also restake by locking their liquid staking tokens (LSTs) into EigenPod. The validator then facilitates the restaking of the LSTs for the crypto-economic benefit of diverse protocols.

What is Eigenpie?

Eigenpie is a sophisticated SubDAO that focuses on staking Ethereum Liquid Staking Tokens (LSTs) via EigenLayer. Eigenpie, created by Magpie—a decentralized liquid aggregation protocol for cross-chain swaps—to advance the development of EigenLayer and broaden the offerings within the Magpie Ecosystem. Eigenpie is dedicated to optimizing user experience by offering a refined range of passive income options within a streamlined and cohesive DeFi ecosystem.

Committed to providing liquid staking services for its users, Eigenpie is leveraging advanced technology to boost users’ involvement in the crypto-economic security of all applications built on the Ethereum network. Its core mechanism allows users to convert their liquid-staked ETH tokens into isolated liquid-restaked ETH tokens, increasing the earning potential of their staked funds.

Brief History

Magpie identified the gap in the fragmentation of various protocols built on Ethereum networks as more applications were required to generate their own trust networks. With EigenLayer’s launch as the first restaking protocol on Ethereum, Magpie developed Eigenpie as an integration with EigenLayer to offer liquid restaking services through the framework of EigenLayer.

Shortly after launch, Eigenpie quickly gained traction and attracted a wide user base and community following. Building on its industry alliances, Magpie has established collaborations with key industry players like Pendle Finance, PancakeSwap, Radiant Capital, and Wombat Exchange in a bid to deliver a unique, secure, and rewarding DeFi experience to the Ethereum community.

Use Case

Eigenpie offers Isolated Liquid Restaking, a solution that allows Liquid Staking Token (LST) holders to restake their ETH LSTs, enabling them to enhance the security of the Ethereum ecosystem while amplifying their potential for higher returns. Once users deposit ETH LSTs on Eigenpie, they receive the specific Isolated Liquid Restaked version of their deposited tokens to earn yield from their underlying LSTs. Currently, there is the option to restake 12 different LSTs on the Eigenpie platform, although the project plans to enable the staking of more LSTs in the future.

Security

Eigenpie prioritizes the security and trust of its users because that forms the foundation of its operations, influencing every decision and innovation. To fortify the security framework of the platform, Eigenpie has integrated an advanced multi-signature mechanism across all its smart contracts. This will consolidate the platform’s security, delivering a unique, secure, and rewarding DeFi experience to the Ethereum community.

As part of its ongoing effort to establish and preserve a strong and secure framework, Eigenpie is proactively engaging in the audits of its protocol. They have engaged top-tier industry experts like BlockSec, PeckShield, and AstraSec to ensure a thorough and rigorous review of the Eigenpie platform. The audits have reassured the high-tier security of the Eigenpie platform and are instrumental in identifying and addressing potential vulnerabilities, further enhancing the platform’s security.

How Does Eigenpie Work?

As earlier stated, Eigenpie allows users to earn passive income by depositing their liquid staked tokens (LSTs) to receive a liquid restaked version of their tokens. To achieve this, the platform adopts an innovative liquid restaking mechanism discussed below:

Liquid Restaking on Eigenpie

Eigenpie adopts a distinctive method for liquid restaking. The platform is dedicated to enhancing user experience by ensuring compatibility with most liquid staking platforms throughout DeFi, emphasizing long-term security and minimizing risks.

To minimize users’ exposure to vulnerabilities, Eigenpie has adopted a “restaked” variant of each LST that is approved for a deposit on the platform. This approach will segregate the risks associated with the depletion of a single LST, which could eventually influence the platform’s native restaked token or potentially other LSTs involved.

Isolated Liquid Restaking

Isolated Liquid Restaked Tokens are LSTs restaked by Eigenpie that can only be minted by depositing a specific LST, not a basket of different LSTs. Users can deposit their LSTs on Eigenpie to receive a liquid restaked version of their specific assets.

This move aims to support an array of LSTs from various platforms, making them available for Isolated Liquid Restaking on Eigenpie. To uphold user experience and facilitate a seamless transition into restaking, the isolated restaked tokens users receive upon depositing their LSTs into Eigenpie will retain their original names, with the prefix “M” added.

Source: Medium.com/@Magpie

Isolated Liquid Restaked ETH

Isolated Liquid Restaked ETH are unique, liquid, restaked ETH tokens native to the Eigenpie platform. LST holders can maximize rewards by converting their assets into Isolated Liquid Restaked (ILR) ETH. With ILR ETH, they can effectively add another income layer to their ETH positions while earning yield from their underlying LSTs. Like Isolated Liquid Restaked tokens, each Isolated Liquid Restaked ETH token is backed by one specific asset.

Upon minting isolated liquid restaked ETH via Eigenpie, users will observe a gradual increase in the value of their liquid restaking token relative to ETH. Furthermore, Eigenpie will allow users to explore other DeFi opportunities through isolated liquid restaked ETH tokens, increasing their potential for higher returns.

How to Mint Isolated Liquid Restaked Tokens

To restake on Eigenpie or participate in the airdrop, you need to mint isolated liquid restaked tokens by following these easy steps:

1. Go to the Eigenpie Website

1. Hover to the Eigenpie Pools
   

1. Choose which LST you want to deposit. Then, input the amount and confirm your deposit

Source: Eigenpie Website

Token IDO

In anticipation of the EGP’s initial DEX offering (IDO), Eigenpie is undertaking some events that attract more users to the platform. For instance, they launched the LST Pre-Deposits event that incentivized early restakers on Eigenpie. The event, which ended on February 9th, 2024, enabled depositors to accrue 1 Eigenpie point per 1 ETH worth of LST deposited. During the first 15 days of the event, the points acquired by depositors received a 2x multiplier, rewarding early supporters for their contributions. The acquired Eigenpie points will allow users to share in 10% of the total EGP supply as an airdrop and access to share in 60% of the upcoming EGP token IDO.

Although the date for EGP’s IDO is yet to be announced, investors have started engaging with the Eigenpie platform to accumulate rewards. With an IDO set at a comparatively low value of $3 million fully diluted volume (FDV), Eigenpie is positioned to have a seamless token launch that will reward early restakers.

What is EGP Token?

EGP, the governance and revenue-sharing token of the Eigenpie ecosystem, promotes decentralized decision-making and financial benefits for its holders. By integrating with various protocols and fostering innovation, Eigenpie enhances its utility, attracting a wider user base. This approach aligns the platform’s growth with participants’ prosperity, driving user engagement and success.

Tokenomics

Eigenpie plans a fair launch without the participation of VCs or any presales activities. With a total supply of 10 million EGP tokens, 40% will be allocated to the initial DEX offering (IDO), 35% to community incentives, 15% to Magpie Treasury, and 10% as airdrop for early supporters. To show commitment to core supporters, the Eigenpie team plans to renounce its token allocation in a bid to create a level playing field for those who were involved in the project from the beginning.

Airdrops and Referrals

Source: Medium.com/@Magpie

Early supporters and users of Eigenpie who deposit any of the approved LSTs will accumulate Eigenpie points. These points will allow users to receive an airdrop of Eigenpie’s EGP token and an IDO allocation equivalent to their accumulated total points. This accumulation is set at 1 point per hour for each deposited LST, allowing holders to earn more points depending on the number of LSTs they hold on Eigenpie.

In addition to the airdrops, early users can earn points by participating in the platform’s early access campaign and referral program. By referring others, depositors can earn additional points proportional to the points accumulated by their referees. For each point a referee accumulates, the referrer will earn 0.1 points at the end of each hour. The referrers and referees can also form a group, accumulating more points as the group expands.

Is Eigenpie (EGP) a Good Investment?

Although Eigenpie is still in its early stages and the liquid restaking utility is a new concept, the initial reaction from the crypto community makes it very promising. In addition, the in-depth security audits, roadmap, community backing, and tokenomics of the project suggest a long-term and sustainable perspective, giving investors extra assurance that Eigenpie is a veritable investment.

Thus, the future looks promising, with enormous prospects for good ROI, particularly during the bull market as adoption grows. However, it is pertinent to understand that cryptocurrencies are incredibly volatile, unregulated & highly speculative, with no consumer protection. Customers are at significant risk of losing capital. Hence, it is advisable to seek financial advice, effectively manage your risk, and only invest what you can afford to lose.

Recent Developments

Chainlink CCIP Integration

Source: Medium.com/@Magpie

Since its launch, Eigenpie has been in strategic partnership with notable players in the Web3 industry. A recent example is its integration of Chainlink CCIP across Arbitrum and Ethereum mainnets. Chainlink CCIP, a comprehensive cross-chain solution for dApps, will enable seamless cross-chain messaging and token transfers on the Eigenpie platform. Because all LRTs issued by Eigenpie will use Chainlink CCIP, users can transfer assets across various networks, enhancing their experience using the platform.

P2P.org Integration

Source: Medium.com/@Magpie

In another announcement, Eigenpie is integrating with P2P.org to boost user engagement and trust within the EigenLayer ecosystem. P2P.org—a platform that provides secure non-custodial staking services for investors— aims to introduce stronger and more adaptable choices to Eigenpie users, enabling them to interact more dynamically with their assets. P2P.org will be a restaking operator for the Eigenpie ecosystem by underpinning the validation of new Automated Validation Services (AVS), fortifying the ecosystem’s performance and reliability.