Restaking Explained: Leveraging Ethereum’s Security

Restaking is an emerging security approach with significant traction since 2023. It leverages the robust Proof-of-Stake (PoS) security of the Ethereum blockchain, extending this security to validate and secure additional networks. According to DeFiLlama, as of October 24th, 2024, restaking has already captured over $15 billion in Total Value Locked (TVL), positioning itself as one of the leading trends in the crypto industry.

In this article, we’ll break down the fundamentals of restaking, introduce the key players driving this sector, and explore how Tanssi is stepping into the scene through a strategic collaboration with Symbiotic, one of the industry's largest protocols.

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From Staking to Restaking

1. Staking:

From the beginning of PoS blockchains, staking has played an essential role in maintaining network consensus and security, with validators locking up tokens to safeguard the network. As of October 2024, Ethereum alone has over $86 billion staked, with a staking ratio of 28.4%. However, traditional staking locks assets to a single network, limiting liquidity and reducing capital efficiency across the broader ecosystem.

2. Liquid Staking:

Liquid staking emerged to solve this problem by enabling users to stake tokens while keeping them liquid for them, enabling them to be used across other DeFi applications. This added flexibility enhanced capital utilization but still focused on securing a single network. Lido Finance is the largest player in this sector, with over $24 billion in TVL.

3. Restaking:

Restaking expands staking’s potential by enabling validators to secure additional networks and services without needing extra collateral. This introduces shared slashing risk across all connected networks, which acts as a deterrent against malicious behavior and enhances security efficiency. This approach boosts blockchain security efficiency while lowering the capital requirements for launching new decentralized services, which could include rollups, oracle networks, bridges, and more, referred to in the industry as Actively Validated Services (AVSs) by Eigen Layer or Networks by Symbiotic. This DeFi sector has seen extremely rapid growth in a short period of time, hitting an all-time high of over $20 billion and currently maintaining around $15 billion in Total Value Locked (TVL), as illustrated in the DeFiLlama chart below.

Restaking TVL in DeFiLlama

4. Liquid Restaking:

Liquid restaking keeps tokens flexible and usable while securing multiple services, optimizing security and accessibility. This approach unlocks a new level of capital efficiency across multi-chain environments.

5. Decentralized Networks (aka AVSs)

AVSs, or decentralized networks, go beyond traditional restaking by offering customizable security frameworks for specific application needs.

How Restaking Works

Restaking builds on the foundation of traditional staking but adds greater flexibility. Rather than locking assets to secure just one network, restaking enables validators to use their staked tokens to secure multiple decentralized networks or services simultaneously.

Here’s how the restaking process works:

1. Stakers stake tokens (e.g. ETH) on a primary blockchain, like Ethereum.

2. Re-staking protocols allow ETH stakers to stake their tokens several times to secure additional protocols and services.

3. Smart contracts govern interactions between stakers, operators, and networks, defining rules for governance, validation, and slashing—where a penalty in one network impacts the staker’s holdings across all connected networks.

This mechanism allows developers to create customized security models that fit specific use cases. For example, a DeFi application can implement strict security policies, while gaming platforms may prioritize performance over strict slashing penalties.

It’s important to note that networks leveraging ETH-grade security through Restaking platforms still need to establish their own operators to set up the network within the protocol.

Here’s a diagram showing the restaking process in the Symbiotic Protocol.

How restaking works

What’s the difference between Restaking and Decentralized Networks (AVSs)?

The concept of restaking and the decentralized networks built on Ethereum-based security is often misunderstood. In Symbiotic protocol, networks are any protocol that relies on decentralized infrastructure to provide a service to any application. This could include enabling developers to deploy dApps by managing transaction validation and ordering, supplying off-chain data to applications, or guaranteeing cross-network interactions.

In essence, restaking serves as the economic security layer, while networks are the applications that utilize this security from a primary proof-of-stake blockchain to create new functionalities. Importantly, this setup introduces customizability for these networks, allowing them to select collateral assets, validation methods, and slashing mechanisms.

For a visual overview, see the image which illustrates this process and the customization options available to networks.

How a Network Works in Symbiotic

Main Players in the Restaking Space

Several projects are shaping the restaking landscape by offering unique approaches to utilizing staked assets across multiple networks. Currently, the three largest ones are Symbiotic, EigenLayer, and Karak, each with its own specialties, as shown in the table below.

Main players in the restaking space

How Tanssi Empowers Restaking

Tanssi builds on top of Symbiotic to empower developers by simplifying the process of building decentralized networks through shared security. Developers can leverage Ethereum-grade security via restaked assets, avoiding the need to create or attract operators to run their networks.

Key advantages include:

• Operator Management: Tanssi simplifies validator management by providing everything necessary to bootstrap a chain. With access to Tanssi vaults, projects benefit from the security that Tanssi attracts by building on top of the Tanssi-orchestrator chain.

• Network Infrastructure as a Service: Tanssi provides core infrastructure services for Symbiotic Networks, including sequencing as a service, data availability, consensus mechanisms, and fast finality. It also supports essential features like RPCs, explorers, indexers, bridges, and oracles, allowing decentralized networks to be launched in minutes.

• Cross-Chain Communication: Tanssi enables efficient cross-chain messaging and interoperability across networks connected to its infrastructure, allowing for seamless integration without custom bridges.

• EVM compatibility: Tanssi offers Substrate as its SDK, a proven framework with hundreds of live deployments. The full toolkit includes Rust and Typescript SDKs, wallets (desktop, mobile, ledger), modules/pallets, simulation tools, and a library of Tanssi templates for various use cases, including EVM compatibility.

Below is a diagram showing how the Restaking process works with Tanssi.

How restaking works with Tanssi

Looking Ahead

Restaking brings a new layer of flexibility to blockchain security by allowing staked assets to secure multiple networks, improving capital efficiency, and enabling tailored security models. Yet, as an emerging technology, restaking is still in its early stages and requires thoughtful implementation.

As projects like Symbiotic advance restaking, Tanssi acts as a practical enabler, streamlining the deployment of restaked networks by automating validator management, reducing operational overhead, and providing scalable infrastructure with added flexibility, including full EVM compatibility.

With Tanssi, developers can bypass infrastructure complexities and focus on building innovative applications. By making access to Ethereum-grade security straightforward, Tanssi positions restaking as an accessible foundation for decentralized applications across ecosystems.