The Risk To Reward Tradeoff of Restaking
Restaking is the practice of using stake to secure multiple networks. In the case of Ethereum, this means 'stretching' the stake in Ethereum validators to secure networks beyond Ethereum's consensus. In theory, this sounds great. More networks, more! In fact, restaking could unlock the world of modular rollups, abundant blockspace, and limitless scalability, or it could lead to network catastrophe.
Eigenlayer has $2 billion in TVL
Coming in at #11 in TVL across the entire DeFi ecosystem, and they haven't even launched yet. The sheer size of Eigenlayer, while still in its infancy, demonstrates the tremendous anticipation around restaking. Well, I was skeptical. Restaking is the practice of using stake to secure multiple networks. In the case of Ethereum, this means 'stretching' the stake in Ethereum validators to secure networks beyond Ethereum's consensus. In theory, this sounds great. More networks, more! In fact, restaking could unlock the world of modular rollups, abundant blockspace, and limitless scalability, or it could lead to network catastrophe.
In this video, I speak to Walter from Gauntlet, global risk manager for several top DeFi protocols.
We unpack the mystery of restaking from first principles:
- Proof of Stake Ethereum since the Merge
- Eigenlayer architecture and AVS applications
- What you can expect from Eigenlayer rewards
Blockchain security has its costs, and you can get paid for providing such security.
DYOR and don't get rekt.
The Rollup
𝗗𝗜𝗦𝗖𝗟𝗔𝗜𝗠𝗘𝗥: 𝘐𝘯𝘷𝘦𝘴𝘵𝘪𝘯𝘨 𝘪𝘯 𝘤𝘳𝘺𝘱𝘵𝘰𝘤𝘶𝘳𝘳𝘦𝘯𝘤𝘺 𝘢𝘯𝘥 𝘋𝘦𝘍𝘪 𝘱𝘭𝘢𝘵𝘧𝘰𝘳𝘮𝘴 𝘤𝘰𝘮𝘦𝘴 𝘸𝘪𝘵𝘩 𝘪𝘯𝘩𝘦𝘳𝘦𝘯𝘵 𝘳𝘪𝘴𝘬𝘴 𝘪𝘯𝘤𝘭𝘶𝘥𝘪𝘯𝘨 𝘵𝘦𝘤𝘩𝘯𝘪𝘤𝘢𝘭 𝘳𝘪𝘴𝘬, 𝘩𝘶𝘮𝘢𝘯 𝘦𝘳𝘳𝘰𝘳, 𝘱𝘭𝘢𝘵𝘧𝘰𝘳𝘮 𝘧𝘢𝘪𝘭𝘶𝘳𝘦 𝘢𝘯𝘥 𝘮𝘰𝘳𝘦. 𝘈𝘵 𝘤𝘦𝘳𝘵𝘢𝘪𝘯 𝘱𝘰𝘪𝘯𝘵𝘴 𝘵𝘩𝘳𝘰𝘶𝘨𝘩𝘰𝘶𝘵 𝘵𝘩𝘪𝘴 𝘤𝘩𝘢𝘯𝘯𝘦𝘭, 𝘸𝘦 𝘮𝘢𝘺 𝘦𝘢𝘳𝘯 𝘢 𝘤𝘰𝘮𝘮𝘪𝘴𝘴𝘪𝘰𝘯 𝘰𝘳 𝘧𝘦𝘦 𝘢𝘴 𝘢 𝘴𝘱𝘰𝘯𝘴𝘰𝘳𝘴𝘩𝘪𝘱, 𝘪𝘧 𝘵𝘩𝘪𝘴 𝘪𝘴 𝘵𝘩𝘦 𝘤𝘢𝘴𝘦 𝘸𝘦 𝘸𝘪𝘭𝘭 𝘢𝘭𝘸𝘢𝘺𝘴 𝘮𝘢𝘬𝘦 𝘴𝘶𝘳𝘦 𝘪𝘵 𝘪𝘴 𝘤𝘭𝘦𝘢𝘳. 𝘞𝘦 𝘢𝘳𝘦 𝘴𝘵𝘳𝘪𝘤𝘵𝘭𝘺 𝘢𝘯 𝘦𝘥𝘶𝘤𝘢𝘵𝘪𝘰𝘯𝘢𝘭 𝘤𝘰𝘯𝘵𝘦𝘯𝘵 𝘱𝘭𝘢𝘵𝘧𝘰𝘳𝘮, 𝘯𝘰𝘵𝘩𝘪𝘯𝘨 𝘸𝘦 𝘰𝘧𝘧𝘦𝘳 𝘪𝘴 𝘧𝘪𝘯𝘢𝘯𝘤𝘪𝘢𝘭 𝘢𝘥𝘷𝘪𝘤𝘦. 𝘞𝘦 𝘢𝘳𝘦 𝘯𝘰𝘵 𝘱𝘳𝘰𝘧𝘦𝘴𝘴𝘪𝘰𝘯𝘢𝘭𝘴 𝘰𝘳 𝘭𝘪𝘤𝘦𝘯𝘴𝘦𝘥 𝘢𝘥𝘷𝘪𝘴𝘰𝘳𝘴.