Overview

Genesis Protocol is the protocol fueling GenesisLRT. We created it to overcome the risks and challenges of the existing EigenLayer restaking solution.

Risks and Challenges of Existing Solution

EigenLayer’s restaking solution introduces a groundbreaking approach to enhance crypto economics security and trust. However, its growth potential can be limited by several challenges and risks. These include liquidity risks, limited DeFi composability, and the competition it faces in comparison to ETH LST yield farming opportunities.

Another problem is regarding the Actively Validated Services (AVS) where there are distinct disadvantages to the current AVS ecosystem: Such as the difficulty to bootstrap a new trust network, there is leakage of value since users pay fees to a separate trust network on top of transaction fees on Etheruem, the cost of providing staking rewards in return for network security far outweighs the operational costs of the AVS and having multiple trust networks means weakened security for dApps since the cost of attack is the minimum cost of corruption across all its dependencies.

Answer to the Problem: Genesis Protocol

Genesis Protocol will create a healthier DeFi ecosystem on Layer2 by strengthening security, allowing users to choose their own operators, validators, and AVSs, and offering a higher DeFi composability through efficient restaking which will attract more liquidity. These measures solve the capital inefficiency and create opportunities to accelerate the growth of restaking on EigenLayer.