# Eigen Foundation Grant Proposal: avs-state-guard

**URL:** <https://forum.eigenlayer.xyz/t/eigen-foundation-grant-proposal-avs-state-guard/14824>\
**Category:** AVS Research\
**Created:** [May 18, 2026, 3:54pm UTC](https://forum.eigenlayer.xyz/t/eigen-foundation-grant-proposal-avs-state-guard/14824 "2026-05-18T15:54:00Z")\
**Posts on this page:** 1\
**Page:** 1

<div class="post-metadata">

**Author:** ![ILE\_LABS](https://yyz2.discourse-cdn.com/flex028/user_avatar/forum.eigenlayer.xyz/ile_labs/32/5080_2.png) [@ILE\_LABS](https://forum.eigenlayer.xyz/u/ILE_LABS)\
**Post date:** [May 18, 2026, 3:54pm UTC](https://forum.eigenlayer.xyz/t/eigen-foundation-grant-proposal-avs-state-guard/14824/1 "2026-05-18T15:54:00Z")

</div>

**Project Name:** avs-state-guard — Application-State-Aware Slashing Prevention for EigenLayer Operators  
**Applicant:** ILE Labs ([github.com/ILE-Labs](http://github.com/ILE-Labs))  
**Program:** Community Initiatives Grants

* * *

## Executive Summary

EigenLayer is the cryptoeconomic bedrock of restaking. By allowing operators to secure diverse Actively Validated Services (AVSs), EigenLayer unlocks unprecedented capital efficiency. However, this multi-AVS model introduces a **systemic security frontier: Cascading, Application-Layer Slashing Risks.**

Currently, anti-slashing frameworks (such as Cubist) are strictly **cryptographic** —they only verify metadata, ensuring an operator does not double-sign conflicting messages at the same block height. They have **zero concept of application-layer state**. If a hacker compromises an AVS client, or if an operational misconfiguration occurs, the node can easily sign a structurally valid but malicious payload (e.g., an oracle price of $0.00, or an invalid bridge state root). Once submitted on-chain, this triggers an automatic **slashing event** , permanently burning millions of dollars in restaked ETH.

**`avs-state-guard`** is the first **application-state-aware** offline slashing guard. Written natively in Rust, it sits as a secure local proxy between the AVS Node Software and the Operator’s Signing Key (KMS/HSM). Before releasing any signature, it spins up a local concurrent fork of the target chain, simulates the transaction outcome, and runs deep safety assertions (reversion checks, boundary deviations). By validating the _consequences_ of a signature before it is generated, `avs-state-guard` provides the ultimate security shield for operators and restakers alike.

* * *

## The Systemic Problem: The Blindspot of Cryptographic Guards

Standard anti-slashing architecture is built under the assumption that “liveness and cryptographic double-signing” are the only risks. This leaves operators completely vulnerable to **Semantic / Application-Layer Exploits**.

### Exploit Vector of Cryptographic Guards:

```auto
[A Hacked AVS Client] 
       │
       ▼ (Generates Malicious Payload: "Oracle Price = $0.00")
[Standard Double-Signing Guard]
       │
       ├─► (Checks: "Is this block height new?") ──► YES
       ├─► (Checks: "Has this height been signed?") ──► NO
       │
       ▼ [APPROVED]
[Signing Key (HSM)] ──► Signs & Broadcasts to Aggregator
       │
       ▼
[On-Chain AVS Slashing Contract] ──► [PERMANENT SLASHING: Millions in ETH Burned]

```

### The Three Core Vulnerabilities of the Current Paradigm:

1. **Semantic Blindness:** If a compromised or buggy AVS node client requests a signature for a payload that violates the AVS’s business logic, a cryptographic guard will approve it as long as the block height is sequential.
2. **Oracle / Bridge Hijacks:** Oracle AVSs (such as eoracle) and cross-chain bridges require operators to sign state updates. A single database corruption causing an invalid state root signature will result in immediate protocol slashing.
3. **Multi-AVS Slashing Cascades:** Because operators run multiple heterogeneous AVSs simultaneously, a single misconfiguration or bug in a minor AVS can trigger a cascading slashing event that drains the operator’s entire restaked pool, destroying their reputation and liquid restaking token (LRT) integrations.

* * *

## The Solution: avs-state-guard (Real-Time State Verification)

`avs-state-guard` changes the paradigm from **cryptographic verification** to **state-aware simulation**. It ensures that an operator’s key _never_ signs a message that would lead to on-chain slashing.

```mermaid
sequenceDiagram
    autonumber
    participant AVS as AVS Node Client
    participant SG as avs-state-guard Proxy
    participant Sim as Local Sim Engine (Anvil)
    participant HSM as Signing Key (HSM/KMS)
    participant Chain as On-Chain Contract

    AVS->>SG: Request Signature (EIP-712 Payload)
    Note over SG: Intercepts raw payload & decodes call
    SG->>Sim: Spin up Concurrent Local Fork & Simulate Transaction
    Note over Sim: Executes validation rules on fork
    alt Simulation Reverts or Violates Safety Bounds
        Sim-->>SG: FAILURE (Slashing Risk Detected)
        SG--xAVS: REJECT & Lock Key (Trigger Alarm)
    else Simulation Succeeds & State Within Bounds
        Sim-->>SG: SUCCESS (Payload Safe)
        SG->>HSM: Authorize Signature Generation
        HSM-->>SG: Return Cryptographic Signature
        SG-->>AVS: Return Verified Signature to Client
        AVS->>Chain: Broadcast to On-Chain Aggregator
    end

```

### Core Architecture Components:

#### 1. The Secure Local Proxy (`avs-state-guard-proxy`)

- Sits between the AVS node container and the Key Management Service (AWS KMS, HashiCorp Vault, or local hardware HSM).
- Written in **Rust** to maintain sub-millisecond overhead, avoiding liveness penalties for time-critical AVS tasks.
- Exposes a standard JSON-RPC signing endpoint that parses EIP-712 or custom AVS message types.

#### 2. The Offline Simulation Core (`avs-state-guard-core`)

- Maintains a hot-synchronized state of the destination chain’s AVS Service Manager and Slashing contracts.
- Upon receiving a signature request, it instantly spins up a local concurrent fork (via an embedded `Anvil` worker) and dry-runs the transaction.
- **State Assertions Executed:**
  - **Reversion Assertion:** Verifies if the on-chain AVS validation code would revert or trigger an assertion flag when this signature is processed.
  - **Boundary Assertion:** Checks if the signed variables (e.g. price feeds, collateral values, bridge balances) deviate from the previous state by more than a custom threshold (e.g., max 10% shift per block).
  - **Liveness / Timing Assertion:** Ensures signatures are sent within valid slot windows to prevent obsolete or frontrun payloads.

#### 3. Operator Safety Dashboard & CLI

- Allows operators to write custom, highly specific rules for each AVS they run.
- Enables dry-running of simulated slash events to test key-blocking mechanics.

* * *

## Technical Specifications & Integration Flow

The tool integrates seamlessly into existing enterprise operator setups without altering their core infrastructure.

### Integration Architecture Overview:

```auto
┌────────────────────────────────────────────────────────┐
│ AVS Operator Node │
│ │
│ ┌─────────────────┐ ┌──────────────────────┐ │
│ │ AVS Node Client │ ────► │ avs-state-guard │ │
│ │ (Docker/eoracle)│ │ (Rust local proxy) │ │
│ └─────────────────┘ └──────────┬───────────┘ │
│ │ │
│ ▼ │
│ ┌──────────────────────┐ │
│ │ Anvil Simulator │ │
│ │ (Concurrent Fork) │ │
│ └──────────┬───────────┘ │
│ │ │
│ ▼ │
│ ┌──────────────────────┐ │
│ │ Safety Checks Pass? │ │
│ └──────┬─────────┬─────┘ │
│ │ │ │
│ YES │ │ NO │
│ ▼ ▼ │
│ ┌─────────┐ ┌─────────┐ │
│ │ HSM/KMS │ │ BLOCK │ │
│ │ (Sign) │ │ (Alarm) │ │
│ └─────────┘ └─────────┘ │
└────────────────────────────────────────────────────────┘

```

* * *

## Structural Roadmap & Completion Milestones

To ensure high-fidelity delivery, the project is structured across 3 logical engineering milestones focusing on core proxy logic, simulator orchestration, and real-world AVS guard integrations.

### Milestone 1: Core Proxy & EIP-712 Decoupler (Weeks 1 - 4)

- **Deliverables:**
  - Rust-native EIP-712 payload decoder and JSON-RPC interception proxy.
  - Support for standard HSM/KMS API integration (HashiCorp Vault & AWS KMS).
  - Local key-blocking fallback mechanism that halts signing when triggered by external triggers.

- **Verification:** Open-source GitHub repository with complete unit tests proving successful proxy interception of signature requests and local signature block triggers.

### Milestone 2: Concurrent Fork Simulator & Assertion Engine (Weeks 5 - 8)

- **Deliverables:**
  - Automated orchestrator that manages local `Anvil` fork initialization from destination RPCs.
  - **Boundary Validation Module:** Custom parser that reads the AVS-specific state change bounds from a local configuration file.
  - **Mock AVS Slashing Testnet:** A complete mock environment containing a sample Oracle AVS and Bridge AVS with custom slashing contracts.

- **Verification:** Integration tests demonstrating a simulated oracle hijack (where a price anomaly is introduced), showing the proxy successfully blocking the key and reverting before broadcasting.

### Milestone 3: Production Ready Integrations & Auditing (Weeks 9 - 12)

- **Deliverables:**
  - Production-ready integration guides and Helm charts for enterprise stakers and operators.
  - Complete open-source CLI suite (`avs-state-guard-cli`) for rule configuration and dry-running.
  - Comprehensive external security audit report of the proxy code.

- **Verification:** Live demonstration of the guard securing a mock operator node against typical AVS database corruptions on holesky testnet.

* * *

## Long-Term Vision & Sustainability

`avs-state-guard` is designed to be a core public good for the EigenLayer ecosystem. By releasing the core proxy and assertion engines as 100% open-source software, we enable any operator to secure their node for free.

To fund ongoing development and maintenance, we will offer:

1. **Enterprise Premium Support:** Dedicated SLAs, integration engineering, and custom private KMS setups for high-TVL institutional stakers.
2. **Custom AVS Adapter Services:** Building highly custom validation rules and simulation modules directly for emerging AVS networks.