Re:Staking Weekly #17
Scale Matters, EigenLayer's $2.5m Security Bounty, Predicate's Alchemy Integration, and Jito TipRouter's 284k February Rewards
Welcome to Issue #17 of the Re:Staking Weekly! 👋
This week, we're diving into scale and network effects — two powerful forces that have yet to be fully captured in Web3. These dynamics have propelled businesses like Amazon and Vercel to unprecedented heights, serving as the secret ingredients behind their compounding growth trajectories. Understanding the economics of scale is key to unlocking mass adoption in our industry.
Also in this issue: EigenLayer’s Eigen Games hackathon winner, EigenLayer’s $2.5 million security bounty competition, Predicate’s Alchemy integration, Jito TipRouter’s $284K February rewards, and more.
Let's go! 🚀
Scale Matters
Over the past week at EthDenver, I’ve been reflecting on the concept of Meta AVS (credit to Ron Turetzky for the name) — frameworks that build AVS — and their role in the evolution of decentralized frameworks.
Tracing the progression from L1 to L2 frameworks and now to verifiable services, a clear pattern emerges: scale has been the defining factor in both the struggles of L1 framework businesses and the initial success of L2 frameworks. As we turn our focus to verifiable services, scale will once again be critical — not just in determining the viability of these frameworks, but in reshaping the fundamental structure of our industry.
The Scale Problem in Framework Businesses
Historically, framework businesses in Web3 have struggled due to their poor scale economics.
The first generation of Web3 frameworks — designed to help developers build L1 networks — has achieved only marginal adoption over a decade, with frameworks like Tendermint Core, CosmWasm, and Substrate seeing just a few hundred deployments. This limited scale can be attributed to high security requirements, rigid architectures, and liquidity fragmentation. Simply put, L1 frameworks were not built for mass adoption.
L2 frameworks have achieved greater scale. In just 2–3 years, we’ve seen hundreds to thousands of L2 deployments, with deployment platforms like Conduit alone launching over 300 L2s. This rapid expansion is driven by localized and modular execution environments combined with a more flexible verification model, enabling application-specific customizations.
That said, L2 frameworks still fall short of an ideal scale economy. While they improved execution throughput and modularity, their focus has largely remained on financial transactions and smart contract scalability. They were not designed for general-purpose cryptographic verifiability beyond state transitions.
The Scale Economy of Verifiable Services
Verifiable services represent a fundamental step up in scale. Instead of hundreds or thousands of deployments, we are now looking at tens of thousands or even more. EigenLayer alone has more than a few hundred AVS on testnet after roughly one year of existence.
Unlike L1s and L2s, which have monolithic and highly rigid application structures, verifiable services are largely customized to their specific functions while benefiting from existing data availability and proof generation services. This flexibility fosters application diversity, which in turn drives scale.
This is where Meta AVS becomes particularly interesting as a business. Without scale, a framework and service business is difficult to justify. However, with scale, other than the obvious revenue potential, it also generates network effect. Once critical mass is reached, new services emerge organically as part of the framework’s evolution.
The best analogy comes from Web2: Vercel and Next.js. Next.js, as the most popular web application framework, has reached 7M monthly downloads and 800K active deployments on its sibling company Vercel. Vercel itself, originally just a deployment service, evolved into a “frontend cloud”, integrating services like observability, fluid compute, AI inference, and more. None of this would have been possible without scale, which allowed Vercel to vertically integrate into the compute stack and SDK layer that developers interact with daily.
We’re seeing this play out in real-time within restaking, the forefront of verifiable service development. Othentic, an AVS framework and deployment service, has spent the past year defining its verifiable service framework and is now shipping operator observability tooling. With roughly 40 AVS developments under its belt and scale compounding, Othentic’s vertical integrations are poised to transform both the operator and staker landscape.
I remain extremely bullish on what scale will bring to the restaking ecosystem. I believe we have underestimated the potential of verifiable service framework businesses — not because the concept itself is flawed, but because we have often overlooked the scale factor. In reality, what Othentic, Layer, EigenLayer, and other verifiable service developers are building could have a significantly larger impact than most anticipate.
Slowly, then suddenly. The log curve will emerge for any business that scales, and this time, it may be verifiable services and Web3.
News Bites
Take a look at the Eigen Games winners. They are more interesting and diverse than you think — verifiable GPU performance services, AI video editing AVS, and P2P order books. Scale is here, and scale is now.
A $2.5 million security bounty competition for EigenLayer’s smart contracts is open until March 28th.
Learn more about stacking EigenLayer AVS to build verifiable AI agents.
Predicate's Policy AVS is now available for integration on Alchemy’s Integration Marketplace.
Read the follow-up research on the risks associated with the slashed asset redistribution mechanism that we have posted 2 weeks ago.
Learn more about UngateAI, an AVS built on the Othentic framework, leveraging trusted execution environments and proof generation to ensure secure and verifiable agent execution.
Jito’s TipRouter has generated more than $284K in rewards for its restakers in roughly 40 days since its inception on January 30, 2025.
That's it for this week's newsletter! As always, feel free to send us a DM or comment directly below with your thoughts or questions.
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See you next week and thanks for reading,