EigenLayer enables redistribution, letting slashed stake be paid to affected parties

Eigen Labs/EigenLayer

EigenLayer activated redistribution on mainnet, allowing slashed operator funds to be paid to affected users instead of burned. LSTs, USDC, and other ERC-20 tokens are eligible; native ETH and EIGEN remain ineligible for now. Cap Protocol exemplifies early adoption, redirecting slashed funds from defaulted operators to protect stablecoin holders.

• Slashed funds from LSTs, USDC, and other ERC-20s are redistributable; native ETH and EIGEN ineligible in this release.
• Operator Sets must be designated redistributable at creation; standard sets cannot be converted later, ensuring predictability.
• Cap Protocol uses redistribution to protect stablecoin holders when institutional operators violate loan commitments.