The Rise of Shared Security and Its Impact on DeFi

In the early days of DeFi, every decentralized network had to fend for itself when it came to security. If a network wanted to be trustworthy, it had to convince enough participants to run validators, stake assets, and maintain consensus. This meant high costs, fragmented security models, and in some cases, questionable incentive structures that left networks vulnerable.

Then came restaking. Instead of requiring every new service to establish its own security model, restaking allowed staked assets to be repurposed to secure additional services. What started as a mechanism for making Ethereum’s security more efficient quickly evolved into a broader concept: Shared Security, where multiple protocols could tap into a unified security layer rather than building their own from the ground up.

In this post, we’ll dive into what shared security is, why it matters, and how it's evolving into a crucial layer of decentralized economic coordination.

TL;DR

• Shared security allows multiple protocols to leverage a common security layer instead of building their own.
• Protocols like EigenLayer, Symbiotic, and Babylon are pioneering shared security infrastructures
• Inception is keen on building the aggregation layer to unify different infrastructures and economic security allocations.

What is Shared Security and Why is it Important?

Shared security allows multiple decentralized protocols to leverage a common economic security layer, reducing the need for each project to establish its own validator set or miner network. Instead of fragmented security models that require individual bootstrapping, shared security ensures that smaller and emerging networks can inherit the robust security of larger, more established networks.

The importance of shared security for DeFi services cannot be overstated:

• Capital Efficiency: Instead of requiring separate security mechanisms for each protocol, shared security allows any asset to be repurposed, increasing reward potential for token holders.
• Decentralization: Smaller networks can benefit from decentralized validator sets without having to recruit and incentivize their own, improving overall network integrity.
• Scalability and Innovation: Projects are able to launch faster and more securely by leveraging an existing security layer, freeing them from the burden of maintaining a complex staking infrastructure.

As DeFi expands, the need for robust security solutions will only grow, and shared security presents a powerful method for mitigating risk while fostering ecosystem-wide trust.

Protocols Building Shared Security Infrastructures

Several protocols are actively shaping the future of shared security by providing infrastructure for staking and restaking:

• EigenLayer: One of the first players in the restaking space, EigenLayer enables Ethereum validators to "re-stake" their ETH to secure additional services, such as rollups, oracle networks, and middleware protocols. EigenLayer effectively creates a marketplace for security, allowing new services to tap into Ethereum’s economic weight.

• Symbiotic: A flexible, permissionless framework designed to facilitate shared security across different networks. Unlike EigenLayer, Symbiotic enables a broader security-sharing model that can be customized. It allows protocols to define their own security parameters, including the selection of validators, slashing conditions, and collateral types.

Core Participants on Symbioitc’s Architecture (Source)

• Babylon: A shared security protocol focused on leveraging Bitcoin’s PoW security to secure PoS chains. By enabling Bitcoin holders to participate in PoS security mechanisms without leaving the Bitcoin network, Babylon introduces a new dimension to shared security by bridging PoW and PoS models.

Each of these protocols contributes to the evolution of shared security, expanding the potential use cases beyond just Ethereum and introducing new methods of security allocation across decentralzied services.

The Need for an Aggregation Layer for Shared Security

As shared security becomes more complex, an aggregation layer is crucial for coordinating security resources across different ecosystems. Unlike a single LRT protocol that only extends security in a siloed manner, an aggregation layer ensures that the deals made for economic security are made efficiently across multiple infrastructures, curators, networks, and node operators.

Key components of an effective shared security aggregation layer include:

• Interoperability: Protocol who are allocation economic security must be able to interoperate in a truly decentralized, unified marketplace.

• Curation: Curators design how shared security is allocated across networks, which node operators handle delegated assets, all within agiven risk/reward framework. To ensure an efficient and competitive landscape, curators must be provided with clear frameworks that empowers them to make informed, strategic decision.

• Multi-Network Distribution: Instead of security being tied to a singular blockchain (e.g., Ethereum), shared security must encompass multiple chains and ecosystems, ensuring that economic security is fluid and adaptable.

Without an aggregation layer, shared security risks becoming fragmented, leading to inefficiencies. A well-structured aggregation layer would ensure seamless coordination, optimizing how economic security is deployed across DeFi and beyond.

This is precisely what Inception is building, an infrastructure designed to harmonize economic security across multiple networks and restaking models. By aiming to solve fragmentation, Inception plans to enable a cohesive, dynamic marketplace for economic security allocation.

Scaling Shared Security

Shared security is redefining how DeFi protocols secure themselves, shifting from isolated security models to a networked, scalable approach that prioritizes efficiency and decentralization. EigenLayer, Symbiotic, and Babylon are pioneering this transformation, but a unifying aggregation layer is essential to unlock its full potential.

With Inception’s aggregation layer, shared security can become a seamless, scalable, and resilient foundation for DeFi, ensuring optimal security allocation across multiple infrastructures and curators.