Actively Validated Services (AVSs)

In the EigenLayer ecosystem, an Actively Validated Service (AVS) is the "customer" of restaking. Building a decentralized network is hard because you need to convince thousands of people to buy your token and stake it to secure the network. If your token's value is low, your network is easy to attack. An AVS skips this "bootstrap" phase by allowing Ethereum validators to secure the AVS using their existing staked ETH. Instead of a "Solana Validator" or a "Chainlink Node," you have an "EigenLayer Operator" who is simultaneously validating Ethereum and an AVS.

AVSs can be almost anything that requires decentralized trust. They could be "Fast Settlement Layers" for rollups, "Oracles" that bring price data on-chain, or "Threshold Cryptography" services for privacy. Each AVS has its own specific rules, rewards, and "slashing conditions." A staker (or operator) chooses which AVSs they want to support based on the risk-to-reward ratio. If they do a good job, they earn fees from the AVS (often in the AVS's native token). If they fail or try to cheat, a portion of their restaked ETH is taken away.

For investors, AVSs represent a new category of "infrastructure plays." Rather than investing in a standalone Layer 1, you can invest in protocols that leverage Ethereum's security to provide specific services. The success of the restaking ecosystem depends on the "demand" for AVSs. If many useful and profitable AVSs launch, the demand for restaking (and thus the yield for ETH holders) will go up. However, the complexity of managing multiple AVSs creates "operator risk." If an operator signs up for 20 different AVSs and one of them has a bug that triggers slashing, the stakers' funds are at risk. Diversification and careful operator selection are vital.