For any new blockchain, the climb to relevance is a steep one. Beyond developing novel technology and attracting a community, there’s the monumental task of bootstrapping security. Securing a new Proof-of-Stake network requires attracting billions of dollars in staked capital to make it prohibitively expensive for attackers. It’s a classic chicken-and-egg problem: you need users to attract value, but you need security to attract users. This is where the powerful concept of “shared security” comes into play, a model pioneered by ecosystems like Polkadot and Cosmos that allows new chains to essentially “rent” security from an established, high-value network.
We’re now seeing a Cambrian explosion of new shared security models, each with its own unique economic design. To truly understand the intricate economics of these large-scale systems, it’s incredibly helpful to first zoom in on a tangible, micro-economic model that already thrives in the wild. That’s why we’re going to use a deep dive into a very specific, profitable role within the Ethereum ecosystem as our case study: how to earn revenue by operating an MEV-Boost relay. By understanding the economics of this single, critical piece of infrastructure, we can unlock the core principles that govern even the most complex shared security architectures.
The Case Study: How to Earn Revenue by Operating an MEV-Boost Relay
Before we explore entire ecosystems, let’s look at the economics of a single, vital job. In the world of Ethereum, value isn’t just in the transactions themselves, but in their order. This is the world of MEV, or Maximum Extractable Value.
A Microcosm of a Service Economy
MEV refers to the profit that can be made by strategically arranging transactions within a block. It’s a complex, competitive field where specialized “builders” construct the most profitable blocks possible. Ethereum’s validators, who are responsible for proposing blocks, don’t have the time or resources to compete in this arena.
This created a need for a marketplace, facilitated by a critical middleman: the MEV-Boost relay.
- Builders send their hyper-optimized blocks to the relay.
- The Relay identifies the most profitable block.
- The Validator requests this most profitable block from the relay and proposes it, earning a substantial tip from the builder.
The relay is the trusted auctioneer. The key to understanding how to earn revenue by operating an MEV-Boost relay is that it provides a highly specialized service. It creates an efficient market where builders and validators can transact without having to trust each other directly. The relay’s revenue comes from charging builders a minuscule fee for this facilitation. In an economy processing billions, these fees add up. This model—providing a specialized, trusted service for a fee—is the fundamental building block of the much larger economic systems we’re about to explore.
The Pioneers: Polkadot and Cosmos
With the relay model in mind, let’s scale up. Polkadot and Cosmos were the first to formalize shared security at the ecosystem level.
- Polkadot’s Model: New chains, called parachains, compete in auctions to lease a “slot” connected to the central Relay Chain. By winning a slot, they get to piggyback on the Relay Chain’s massive pool of validators for their security. The economics: They pay for this security through the tokens they lock up to win the auction, effectively paying rent for their security.
- Cosmos’s Model: Through Interchain Security, the central Cosmos Hub can lend its validator set to smaller “consumer chains.” The economics: In exchange, the consumer chain shares a portion of its transaction fees and token inflation with the Cosmos Hub’s validators and stakers. It’s a direct fee-for-service model.
Both are brilliant solutions, but they represent just the beginning. The next wave of innovation is creating even more flexible and capital-efficient economic models.
Beyond the Pioneers: The Next Generation of Economic Models
The latest shared security designs are pushing the boundaries, creating new markets for trust and security. Understanding the economics here is crucial for any builder or investor.
EigenLayer and the Market for “Restaking”
EigenLayer introduces a groundbreaking concept on Ethereum: restaking. Stakers who have already locked their ETH to secure the Ethereum network can re-stake that same capital to secure other applications, known as Actively Validated Services (AVSs). These AVSs can be anything from new oracle networks to data availability layers or bridges.
The Economics: This creates a three-sided marketplace.
- AVSs get access to robust, decentralized security without having to build their own validator set from scratch. They pay for this security by offering rewards (often in their native token) to the restakers.
- ETH Stakers can opt-in to secure these AVSs to earn extra yield on top of their standard Ethereum staking rewards.
- The Risk: Stakers also take on additional “slashing” conditions. If they act maliciously while securing an AVS, their restaked ETH can be slashed (confiscated).
This is a profound economic shift. It turns Ethereum’s staked capital into a productive asset that can be leased out, creating a dynamic, open market for decentralized trust. This sophisticated model of paying for a specialized service directly mirrors the core principle we learned from studying how to earn revenue by operating an MEV-Boost relay.
Mesh Security and Mutual Defense Pacts
Another emerging model is “mesh security.” Instead of a single “hub” chain providing security to “consumer” chains, a group of chains agree to mutually secure one another. Validators on Chain A can also validate blocks for Chain B, and vice-versa.
The Economics: This is like a mutual defense pact or an economic alliance. The cost of security is distributed across the entire “mesh” of chains. The economic benefit is that each chain in the mesh becomes more secure as the total staked value of all participating chains grows. It fosters a collaborative, rather than a purely transactional, economic relationship.
Layer 2 Rollups as an Economic Trade-Off
Optimistic and ZK-Rollups (like Arbitrum, Optimism, and zkSync) are perhaps the most widely used form of shared security. They process transactions on a separate, faster layer (L2) and then post the transaction data back to the ultra-secure Ethereum Layer 1 (L1).
The Economics: They directly inherit the security of Ethereum, but it’s not free. Rollups pay Ethereum gas fees to post their data. This is a significant operational cost. The economic trade-off is clear: they pay a variable fee to the L1 in exchange for near-perfect security, which allows them to offer their users much lower transaction fees than the L1 itself.
Economic Principles: From Relays to Restaking
Whether looking at the micro-level of a single relay or the macro-level of restaking, the same economic principles apply.
- Principle 1: The Value of Specialization: A core lesson from how to earn revenue by operating an MEV-Boost relay is that specialization creates value. Relays specialize in market facilitation. In shared security, hub chains specialize in providing high-grade, decentralized security, allowing app-chains to focus solely on building great applications for their users.
- Principle 2: Security as a Quantifiable Service: The new models treat security not as an abstract concept, but as a quantifiable, billable service. Consumer chains pay fees, parachains lock up capital, and AVSs offer rewards. The service is security, and there’s a clear price for it.
- Principle 3: The Trusted Core Must Be Profitable: For any of these models to work, the core security providers (validators and stakers on the hub chain) must be adequately compensated for their service and risk. If running a validator on the Cosmos Hub or restaking on EigenLayer isn’t profitable enough, the entire economic model falls apart. This is the same reason why a deep understanding of how to earn revenue by operating an MEV-Boost relay is vital for its operators—profitability sustains the infrastructure.
Conclusion: The Open Market for Trust
The evolution of shared security is one of the most exciting frontiers in the blockchain space. We are moving from monolithic, isolated systems to interconnected, collaborative economies. The underlying theme is the creation of an open market for decentralized trust, where security can be bought, sold, and leased in increasingly flexible and capital-efficient ways.
The economics can seem complex, but the core ideas are simple. By breaking down a tangible business model like an MEV-Boost relay, we see the foundational principles of specialization and fee-for-service that govern even the most ambitious ecosystem-level designs. Understanding how to earn revenue by operating an MEV-Boost relay doesn’t just teach you about Ethereum; it provides a powerful lens through which to view the economic architecture of our entire multi-chain future.
Engaging FAQ Section
Navigating the world of blockchain architecture? Let’s clarify some common questions.
Q1: What is “shared security” in the simplest terms? A: Imagine a small, new bank wants to be as secure as Fort Knox. Instead of building their own vault from scratch (which is incredibly expensive), they pay a fee to rent a secure room inside Fort Knox. In blockchain terms, a new, smaller chain (the bank) pays a fee to a large, established chain (Fort Knox) to use its powerful set of validators for security.
Q2: What’s the main economic benefit for a new chain to use shared security? A: It drastically lowers the barrier to entry. Instead of needing to attract billions of dollars in staked assets to secure itself, a new chain can launch quickly and securely by paying a much smaller, predictable “security rent” to a larger chain. This allows them to focus their resources on building their product and community.
Q3: What is EigenLayer’s “restaking” and how is it a shared security model? A: Restaking allows someone who has already staked ETH to secure Ethereum to simultaneously use that same ETH to secure other applications (like oracles or bridges). It’s a shared security model because these applications get to borrow the economic security of Ethereum’s staked capital without creating their own validator set. In return, the stakers earn extra rewards for taking on the extra responsibility.
Q4: What’s the connection between these big security models and how to earn revenue by operating an MEV-Boost relay? A: The connection is the underlying economic principle: specialization and fee-for-service. A relay specializes in one job (facilitating the MEV market) and earns revenue by charging a fee. Shared security models are a scaled-up version of this: a “hub” chain specializes in one job (providing security) and earns revenue by charging fees (in various forms) to the chains that use its service.
Q5: Is it risky for validators to participate in these shared security models? A: Yes, there is an element of added risk. For example, in the Cosmos model, if a consumer chain has a bug, the Hub validators who also validate that chain could get “slashed” (lose some of their staked tokens). With EigenLayer, restakers accept new slashing conditions for each new application they agree to secure. This risk is why they are compensated with extra rewards—they are being paid to take on more responsibility.
