What is restaking?
- Author
- CRYPTO PORT Editorial
- Published
- Updated
- Reading time
- 5 min
In short
Restaking pledges already-staked assets as security for additional services. One pot of capital does several jobs, which raises efficiency — and multiplies the conditions under which it can be slashed, and therefore the routes by which it can be lost.
Key points
- Already-staked assets also secure additional services
- One pool of capital backs several obligations
- The number of slashing conditions multiplies
- Correlated failures across services are a known concern
Definition
A mechanism in which staked assets, or the tokens representing them, are additionally pledged to secure other protocols or services, exposing them to slashing under multiple sets of rules.
The background problem is that new services struggle to bootstrap their own security. A bridge or an oracle is only trusted if misbehaviour can be punished by seizing collateral. Restaking lends existing staked capital for that purpose, so a new service can launch with substantial security behind it from day one.
Participants choose which services to pledge to. Each additional commitment adds another job the same capital performs — and another set of rules under which it can be slashed. The slashing conditions stack up against a single pool of assets.
The concern most often raised is correlated failure. When many participants back the same cluster of services, one large slashing event cuts collateral across all of them at once. The services whose collateral just shrank become less secure themselves, so the damage can propagate. The design is still young and its behaviour under severe stress has not been thoroughly tested.
Watch out for
- · A violation at any one of the services you back can slash the underlying stake
- · Withdrawal involves a waiting period, so you cannot exit quickly when conditions deteriorate
- · The design is new, and how a large slashing event propagates is largely untested