Redistribution is Live on Mainnet

Crypto Builder's next big unlock is here

Today, Eigen Labs is pleased to announce Redistribution is live on Mainnet. Redistribution is the next iteration of the slashing functionality of EigenLayer. Redistribution unlocks new use cases for AVSs, offering more options for liquidity management and risk tolerance for them and their customers. 

What is Redistribution?

Redistribution is the next phase of EigenLayer’s Slashing upgrade. Slashed funds may now be repurposed and distributed according to their specific use case, instead of being burned. This is an expressive change for slashing, opening up new use cases — such as lending or insurance protocols — by enabling redistribution when commitments are broken or conditions change, such as during liquidation or user reimbursement. 

Redistribution in Action with our Partner, Cap Protocol

Cap, the stablecoin protocol, is an early adopter of the redistribution feature. Cap outsources the generation of yield via a set of institutional operators ranging from banks and HFT firms to market makers, who must commit to specific loan terms and secure delegations from EigenLayer restakers to be eligible to borrow. When operators violate their commitments, Cap can initiate slashing of the backing stake. Instead of burning these funds, redistribution allows the funds to be redirected as a protective measure for stablecoin holders. 

Cap will go live on mainnet later in 2025. With redistribution, Cap can become a stablecoin with credible financial guarantees, mitigating the risks associated with yield generation.

“Redistribution fundamentally transforms how protocol rewards and security guarantees are allocated within EigenLayer. By enabling more direct and instant alignment between AVSs, restakers, and service consumers, it enhances capital efficiency, simplifies economic design, and unlocks a new layer of modular composability. It’s a critical step toward building a practical foundation for web3 infrastructure at scale. Cap is pleased to collaborate with Eigen Labs and be an early adopter of this feature.” Benjamin - Cap Founder

How Does Redistribution Work?

Redistributable slashing requires minimal changes to the core protocol, and developers can leverage previously designed slashOperator mechanics. Developers can add the redistribution feature to a new Operator Set by making the following changes: 

• Create a new type of Redistributable Operator Set.
• Handle a redistributionRecipient. This is a field in the new `redistributableOperatorSets` that receives slashed funds when clearBurnOrRedistributableShares is called to transfer funds out of the protocol.
• Develop a contract or mechanism to define slashing conditions and for redistributing funds outside of the EigenLayer business logic. A slashId is now provided with each slash, which helps in downstream programmatic redistribution and accounting.

Redistribution Example - Crosschain Interoperability

Previously, Eigen Labs shared examples of how slashing can work with example use cases. The use cases for redistribution build upon the previous functionality by making productive use of slashed assets (e.g., LSTs). This feature expands new commitment-based usage of funds for things such as lending or increased assurance. An example of this redistribution-powered functionality is crosschain interoperability. 

A bridge between blockchains, such as Ethereum and an L2, is typically used to move assets from one place to another. These transactions often occur by locking assets on one chain and unlocking them on the other. Due to the nature of confirmation times and different network configurations, this crosschain transaction can take minutes, hours, or even days for the two blockchains to complete guarantees and assurances.

With redistributable slashing, a bridge can dramatically improve its UX. Bridge users can have instant access to assets on a new chain, perhaps for a higher fee, and the bridge operator could claim that “interoperability occurs quickly and successfully!” Leveraging redistributable slashing, bridge operators can codify an SLA as a slashing condition. This condition will hold Operators accountable for breach of SLAs and slash the Operators if they fail to meet them. Once slashed, the impacted funds can be redistributed, rather than burned, to Operators who have met their SLAs in accordance with the predetermined slashing conditions. This functionality allows the bridge operator to make stronger claims to users about the quality of their service because Operators are now deeply incentivized to meet their SLAs with the launch of redistribution.

Key Reminders:

• Fully opt-in for AVSs and Operators: Like all slashing condition features, redistribution is opt-in only for AVSs and Operators. AVSs must create new Operator Sets to enable redistribution, then Operators choose whether to allocate to the Operator Set and accept its rules and slashing conditions. Stakers can decide to delegate to or undelegate from Operators allocated to redistributable Operator Sets, but the Operators make the choice of which AVSs to run.
• Asset compatibility: Native ETH and EIGEN are not yet eligible for redistribution. All other assets, like LSTs, USDC, AVS and other ERC20 tokens, are eligible for redistribution in this release.
• Operator Sets must be redistributable at their creation: As a result, the protocol can make guarantees to Stakers and Operators over the lifetime of an Operator Set. A standard Operator Set cannot become redistributable, and a redistributable Operator Set cannot have that property removed. 
• Stakers should evaluate risk/reward profiles: Stakers should carefully consider the AVSs that their delegated Operators are running, and consider the risk and reward trade-offs. Redistributable Operator Sets may offer higher rewards, but these should be considered against the increased slashing risks, the slashing conditions, and redistribution logic of the AVS. When Operators are slashed, Stakers’ funds are impacted. 
• Stakers should consider security implications: Together, slashing and redistribution are powerful features that are ultimately enforced through predetermined slashing conditions implemented by the AVS. AVSs are encouraged to implement robust and secure mechanisms around the slashing conditions and redistribution recipient feature of their Operator Sets. In the absence of these measures, Stakers are at an increased risk of loss of funds to a malicious, negligent or compromised AVS. In addition, if an Operator is compromised, it may stand up its own AVS to steal user funds. Stakers should carefully consider the reputation and legitimacy of AVS teams and Operators when making delegations. These attack scenarios are outlined in more detail here.

EigenLayer Upgrades Beyond Redistribution

With the core protocol now feature-complete, Eigen Labs has entered a new phase: expanding what's possible when services can make and keep verifiable commitments. The team is focused on delivering code, templates, and standards for launching services across chains. Including this latest mainnet upgrade, users can also find the Massive Optimized Operations (ELIP-009) feature. This upgrade benefits Operators with upgrades, including:

• Up to 64x reduction in proof size and gas costs for restakers with multiple validators. Operators may convert existing validators to compounding 0x02 credentials, allowing Ethereum consensus layer rewards to compound directly without any user intervention or network fees.
• Support for execution layer triggerable validator withdrawals. This feature solidifies the EigenPod owner’s control over validator assets, opening new opportunities in staker-operator relationships. This feature is also crucial to and forward-compatible with the planned implementation of redistribution for native ETH (See ELIP-006)

Get Started Now

• Read Documentation to get started: Redistribution Docs
• Learn more about what users can expect with Redistribution here.
• Read the Redistribution ELIP and comment on the Discussion Post
• Reach out with questions on Discord
• Track ongoing Protocol Updates on the Forum