Token restaking, explained before the extra risk is locked in.
Staking locks capital to secure a base blockchain. Restaking commits that same capital to validate extra services.
How it works
Staking locks native tokens in a validator contract. The validator earns rewards for proposing and checking blocks according to one network rulebook. If the validator breaks those rules or goes offline, the network cuts its stake.
Restaking re-uses that locked deposit to back other software systems: oracle feeds, bridges, data availability layers, and rollups. Instead of backing one chain, the token backs several rulebooks at once.
Three restaking models
Restaking setups differ based on where the capital sits and how penalties are enforced:
Capital is staked ETH or liquid staking tokens. Restaking is handled through smart contract withdrawal credentials or deposit vaults. Depositors face two penalty layers: Ethereum base consensus cuts and secondary service cuts.
Capital stays on the Bitcoin blockchain, locked in native UTXO timelocks. Slashes are enforced cryptographically: if an operator signs conflicting blocks on a secondary chain, their private key is leaked to the Bitcoin network.
Protocols allow ERC-20 tokens, stablecoins, or LP shares to serve as economic security for individual services. Risk stays isolated inside specific vaults, shifting solvency and liquidity risks to depositors.
Slashing is active
Early restaking networks ran with penalties switched off. Slashing went live on EigenLayer mainnet in April 2025, and applies to operators who opt into a service's rules:
Software bugs, operator misconfigurations, or downtime on connected services burn real tokens on-chain.
Staked capital is not restaked by default. An operator has to join a service's rules, and a depositor has to delegate to one who has.
Extra yield comes from fees paid by real service users. Net payouts must cover operator cuts and protocol fees.
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