What is Restaking?
Restaking is an advanced concept in decentralized finance that involves leveraging staked assets to secure additional blockchain applications or protocols. Traditional staking requires users to lock up their crypto assets in a blockchain network to support its operations, such as validating transactions and securing the network. In return, participants earn rewards, typically in the form of additional crypto rewards. Restaking builds on this foundation by allowing staked assets to be used multiple times across different protocols.
Essentially, it means taking assets that have already been staked in one blockchain (such as Solana) and using them to provide security for other blockchain applications or decentralized applications (dApps). This creates a layer of compounded security and potential for increased rewards without needing additional capital.
How restaking differs from traditional staking
Single use VS Multiple uses
Traditional staking involves staking assets once to secure a single network, while restaking allows those assets to be used simultaneously across multiple networks or applications.
Economic efficiency
Restaking maximizes the utility of staked assets, potentially increasing returns by securing multiple protocols without the need for additional funds.
Enhanced security
By spreading the staked assets across various protocols, restaking can enhance the overall security of smaller, emerging validors that do not have enough individual staking power.
