- Two blockchain researchers propose a new restaking system.
- They say it's more efficient and secure than existing methods.
Blockchain researchers have published a paper on a new restaking system that they say is more efficient and secure than current methods.
Called Elastic Restaking, the new approach lets blockchains squeeze more efficiency out of restaked assets while also improving on security.
“What if I could allocate some portion of money to a service, but I could have, across all my allocations, more than 100%? This is what we call Elastic Restaking,” Roi Bar-Zur, one of the paper’s authors at the Technion Israel Institute of Technology, told DL News.
“The whole is more than the sum of its parts.”
Restaking, the practice of using staked crypto assets to secure additional blockchains or services, has ballooned into a $15 billion sector.
However, concerns over security and a lack of demand for such actively validated services — or AVSs — have weighed on restaking.
Elastic Restaking
Elastic Restaking, if adopted, could give restaking a much needed boost, the researchers said.
Currently, restaking services like EigenLayer use a so-called unique stake system. It means that when restaked assets secure multiple services, the funds securing those services cannot exceed 100% of the total stake.
In other words, you generally can’t use the same restaked assets twice.
Elastic Restaking, on the other hand, is more efficient, claim the researchers. It lets the same restaked assets cover multiple services at the same time, exceeding the 100% limit. When allocations are lost, through slashing, for example, the remaining stake stretches to cover the remaining allocations, ensuring they are secure.
Slashing happens when a validator lies, or goes offline when it should be processing transactions. To make sure validators behave, the blockchain automatically takes some of their locked assets as a penalty.
The research was conducted by doctoral candidate Bar-Zur and associate professor Ittay Eyal as part of the Initiative for Cryptocurrencies and Contracts, a group of academics who specialise in blockchain research from across 11 different universities, including Cornell, Yale, and UC Berkeley.
Restaking risks
The development comes as EigenLayer, the biggest restaking protocol with some $7.5 billion of restaked assets, plans to activate slashing on April 17.
So far, restaked assets on EigenLayer couldn’t be slashed, meaning that there’s no penalty for validators who don’t stay online and produce accurate data.
“This is a major step forward in the EigenLayer protocol because it allows for a free marketplace where Operators can earn rewards for their work and AVSs can launch verifiable services,” EigenLayer said in a blog post announcing the move.
But there are risks.
Spinning up new services that depend on the security of restaked Ether could potentially weaken Ethereum’s security. Any issue within one part of the system could cause a ripple effect on these added layers that are built on restaking, especially if they’re not meticulously designed.
“I would advocate for EigenLayer to treat restaking like AI and develop a strong internal ‘alignment’ culture and team,” Justin Drake, a researcher at Ethereum Foundation, previously told DL News.
Restaking synergy
Elastic Restaking could also help balance the security concerns around restaking.
If properly tuned, the new system could provide benefits to networks like Ethereum that outweigh restaking risks.
Bar-Zur gave the example of EigenLayer, which lets Ethereum users restake Ether.
“EigenLayer can bring more stake to Ethereum, and that would make Ethereum even more secure in the end,” he said.
The more Ether users stake on the Ethereum network, the more expensive it becomes for a bad actor to attack it, increasing security.
But it’s still early days.
Bar-Zur is yet to talk to any restaking protocols about potentially implementing Elastic Restaking.
“We could talk to them if they’re interested,” he said. “I think there’s some benefits.”
Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.
