1. Key Takeaways

The restaking narrative first captured public attention at DevConnect 2023, and its adoption has skyrocketed ever since. The industry has grown exponentially, evolving from a single venture, EigenLayer, into a thriving ecosystem with multiple restaking platform providers, operators, Liquid Restaking Protocols, and risk specialists across various crypto networks.

Restaking is still a new primitive, and the community should closely watch the second-order effects, market dynamics, and challenges it may encounter. It is clear now that restaking has grown into a major industry branch, with room for multiple competitors across the restaking stack. From core platforms like EigenLayer, Symbiotic, Babylon, and Jito to Liquid Restaking Protocols and DeFi derivatives, each venture brings its own unique approach and vision. Restaking is proving that it’s not a “winner-takes-all” market.

Liquid Restaking Protocols (LRTs) are often compared to Liquid Staking Tokens (LSTs), but they are fundamentally different. LSTs carry a homogeneous economic risk profile, while LRTs deal with heterogeneous ones. LSTs have uniform risk tied to underlying base layer assets i.e. ETH, whereas LRTs, on the other hand, are navigating diverse risks such as AVS-specific factors—like inflation, slashing conditions, and technical risks—while supporting various collateral types and handling payments in multiple currencies.

The whole 2024 may be remembered as “Bitcoin’s Renaissance,” with numerous teams enabling BTC holders to extend the asset’s economic potential to secure other networks, without relying on third-party trust or bridging to other chains. Babylon is leading the charge, unlocking Bitcoin’s crypto-economic power through strong technical expertise. A growing ecosystem has emerged around Babylon, including new Bitcoin Liquid Staking players like Lombard, Solv Protocol, PumpBTC, and others.
The Solana staking industry often flies under the radar due to Ethereum’s broader adoption, but it’s growing steadily with brand-new ideas. Restaking has already gained traction on Solana, with Jito Network leading the sector, alongside others like Solayer, Cambrian, and Picasso, all developing shared security programs. These initiatives are designed to fill the missing piece in the path toward full decentralization for Solana-native protocols.
Oracles play a crucial role in restaking on multiple levels. They can be integral to the core design of restaking platforms, while also addressing the growing need to accurately price a new category of crypto restaking assets with diverse economic and technical characteristics. Moreover, oracle networks present one of the most compelling use cases for shared security. Restaking collateral allows for innovations beyond traditional oracle design, such as enhancing network resiliency and service quality by increasing data manipulation costs, or creating new price feed models powered by a cost-effective restaking data availability layer.

Featured Projects and Organizations

RedStone, as the author of the report, would like to express true gratitude to all the contributors, projects, and key opinion leaders who helped us create such a comprehensive piece on the restaking landscape. The depth and breadth of this report would not be possible without these individuals – thank you… and many more!

Find out where PoS is headed next at the Staking Summit, November 8-9, 2024, in Bangkok, Thailand

2. What Is Restaking?

EigenLayer: Pioneering the Frontier of Restaking

It’s hard to believe, but EigenLayer and the broader restaking movement have been in the public eye for over a year since EigenLayer launched deposits in June 2023. By now, the restaking industry accounts for roughly a third of the total TVL locked on Ethereum. However, don’t let that fool you – the true implementation of the seemingly simple idea of extending economic security to multiple networks is incredibly challenging. The complexity lies not only in integrating this primitive so close to the blockchain’s consensus layer but also in evaluating and predicting the second-order effects of this entirely new, uncharted concept. Before diving into these topics, let’s take a step back and recap restaking and EigenLayer’s pioneering role in a nutshell.

EigenLayer, though complex and multifaceted, can be fundamentally understood as a general-purpose, dual-sided marketplace for decentralized trust. Built atop Ethereum, arguably the most extensive programmable decentralized trust network, originally, it solely focused on separating Ethereum’s trust layer, allowing its components to be redeployed for various purposes. EigenLayer’s structure is built around its two-sided nature. On one side, we have Actively Validated Services (AVS) – systems that require their own validation processes, forming the demand side of the EigenLayer marketplace. This includes a diverse range of technologies across all parts of the stack, like sidechains, data availability layers, new VMs, keeper and oracle networks, bridges, threshold cryptography, and trusted execution environments. Some notable examples of AVSs include EigenDA, Witness Chain, and RedStone Oracles. On the other side are the Restakers – users who stake ETH natively, through liquid staking tokens (LSTs) or recently introduced permissionless support for any ERC-20 token and opt into EigenLayer’s smart contracts for restaking. They make up the supply side, extending crypto-economic security to additional network applications while earning extra rewards.

Throughout 2024, EigenLayer made significant strides in realizing its ambitious vision, swiftly dubbed Humanity’s Permissionless Coordination Engine. The year began with the announcement of a $100 million Series B raise, which empowered founder Sreeram Kannan and his team to rapidly scale up, bringing in top-tier experts across every relevant discipline. With ample resources, the team was well-positioned to accelerate the “Infinite Games” project. Building on this momentum later in the year, EigenLabs acquired the Rio Network, further leveraging the deep expertise of a crypto-native team to supercharge the EigenLayer ecosystem. Additionally, 2024 witnessed the launch of the highly anticipated EIGEN token, introduced through the innovative stakedrop concept, marking a milestone in crypto history. This was followed by establishing the Eigen Foundation – an independent, shareholder-less entity dedicated to driving the growth of the EigenLayer ecosystem. EIGEN has recently became transferable, and managed to garner significant attention from crypto. EIGEN brought a novel token use case, aptly named Intersubjective Security, which is essentially a sophisticated way of offering forking-as-a-service for protocols beyond just Layer 1s. Additionally, EigenDA was launched on Mainnet, delivering an impressive throughput of 10MBs per second. To put this in perspective, it’s several hundred times more than the native capabilities of Ethereum’s protodanksharding data availability, all while being achieved at a fraction of the cost. EigenDA also pioneered novel support for native token restaking for Layer 2 networks, a strategy that arguably aligns incentives among key L2 actors, giving them a significant advantage in the fierce DA wars. With so much innovation happening across various fronts, even savvy crypto observers find it challenging to keep up with all that EigenLayer is accomplishing. Some other notable developments include the launch of AVS Mainnet rewards and the introduction of Programmatic Incentives – a new mechanism that rewards stakers and operators for supporting multiple AVSs, driving demand, and aiding in the price discovery for shared security. Additionally, EigenLayer proposed a new slashing design and continued to develop its governance structure, further strengthening its ecosystem.

The EigenLayer team, are true visionaries for pioneering such a complex new structure that opens countless doors for blockchain innovation. We’re extremely grateful to be closely connected with the EigenLayer team, building as an AVS ourselves, and supporting the broader ecosystem with our solutions. However, no one could have anticipated all the second-order effects, market dynamics, and challenges that would need to be overcome for restaking to truly take off as a new primitive. It quickly became clear that restaking would become such a significant part of the industry that there’s room for multiple players across the entire restaking stack, from core restaking platforms and Liquid Restaking Protocols to aggregators, DeFi-focused derivatives, and more. Each venture distinguished by its unique approach, tech stack, and ideology. This report is designed to do exactly that: provide a comprehensive yet detailed overview of the current, expanding restaking landscape.

Restaking the Symbiotic Way

Symbiotic is the new cool kid in the restaking town. Introduced in early 2024, it quickly captured the crypto community’s attention, gaining significant mindshare in the restaking space. Backed by a team of top-tier crypto veterans, Symbiotic’s momentum was further boosted by a substantial seed round led by Paradigm, positioning it to become the “Uniswap of restaking.” The project also received strong public support from the founders of staking giant Lido, with some seeing it as Lido DAO’s proxy in the restaking wars, further driving initial deposit interest. The strong market demand for Symbiotic is evident, with the deposit cap filling up just four hours after the initial increase, tripling the total value locked (TVL). Currently, the protocol boasts an impressive $1.7 billion in TVL just a few months after starting to accept deposits. But what truly sets Symbiotic apart from other restaking platforms, especially EigenLayer?

Initially, the permissionless support for any ERC-20 asset like Ethena’s USDe or Frax’s FXS, even those not based on Ethereum Mainnet, caught the public’s attention. However, from the start, EigenLayer also embraced the concept of shared security derived from virtually any crypto asset. Now that this is implemented in the protocol, users must dig deeper to spot the differences between the leading restaking platforms.

Symbiotic’s modular design offers extensive customizability across every aspect of the restaking equation:

Restakers:

Restakers can delegate assets beyond ETH and select trustless Vaults, which in Symbiotic’s terminology refers to a token pool deposit contract, to outsource security to AVSs. These Vaults allow for adjustable parameter updates to ensure user protection. What makes Symbiotic unique is its ability to deposit collateral into immutable, pre-determined Vaults, ensuring that the terms cannot be altered in the future. Unlike EigenLayer, Symbiotic provides the option to mint a corresponding ERC20 token to represent each vault.

Networks (AVSs):

Networks can collaborate with top-tier operators who have verified credentials, selecting them based on reputation or other important criteria when sourcing security. The flexibility in collateral options expands the security pool, potentially lowering security costs for networks. Network builders, including projects involving bridges, rollups, MEV, and appchains, have full control over their restaking implementation. They can define every aspect, such as collateral assets, node operator selection, rewards, and slashing, all within Symbiotic’s thin design.

Operators:

Operators can secure stakes from a diverse range of restakers with different risk tolerances without the need to establish separate infrastructures for each. This allows for greater customization of shared security while minimizing technical and economic overhead for the protocol.

Moreover, Symbiotic offers flexibility in handling slashing incidents by introducing a new actor class called Resolvers. Similar to a slashing veto committee in EigenLayer, Resolvers can veto slashing when it is wrongfully applied. The terms for AVSs are proposed by Resolvers and accepted by vaults that provide collateral backing to operators. A vault can request multiple Resolvers to cover the collateral or integrate with an oracle-based dispute resolution solution like the RedStone Oracles framework.

Another key factor that significantly boosted the platform’s growth is its strategic partnership with Mellow Protocol. Mellow is a leading Liquid Restaking Protocol that is fully aligned with Symbiotic, enabling the permissionless creation of modular LRTs. Traditional LRTs often force users into a single risk profile when opting into multiple shared security networks, which fails to address the diverse needs of users and overexposes them to various risks. Mellow externalizes risk management by allowing for a wide range of risk profiles, thus creating a modular infrastructure for the creation and curation of LRTs. The list of risk curators already includes impressive names like RE7 Labs, Steakhouse, MEV Capital, P2P, Chorus One, and Renzo Protocol. Additionally, DeFi partners such as Pendle and Gearbox are helping to further accelerate the Symbiotic and Mellow Points momentum. Currently, Mellow Protocol has attracted $700 million in value locked, accounting for nearly half of the total TVL deposited into Symbiotic.

Symbiotic understands that the core value proposition of shared security lies in decentralizing both new and existing networks. As blockchain networks and protocols become increasingly complex, Symbiotic recognized early on that it will become progressively harder to decentralize all core parts of various tech stacks. To address this, Symbiotic has made a clear distinction by focusing exclusively on its core offering, the restaking platform itself, rather than trying to boost adoption through additional in-house services or native restaking. This focused approach has driven significant demand on both the restaking supply and demand sides.

Symbiotic recently announced its first Partners Cohort, featuring an impressive 40 partners building on top of the system, including prominent teams such as Ethena, Frax, Etherfi, and our own team at RedStone Oracles, among others. We will support Symbiotic in three key ways:

Delivering oracle price feeds to core Symbiotic modules for the denomination of tokens to USD
Exploring the RedStone data aggregation network
Supporting other networks building on Symbiotic with our data feed

Liquid Restaking Protocols: The Binding Force of Restaking

Many view Liquid Restaking Protocols (LRTs) in the same light as their Liquid Staking (LSTs) counterparts. On the surface, they appear quite similar, allowing users to deposit primarily ETH or its derivatives and outsource the technical responsibilities of being a validator to a specialized entity while still receiving most of the validator rewards. Early in the restaking journey, restaking wasn’t possible without first staking ETH natively, which reinforced the perception that LRTs were simply an additional layer of staking with a similar risk profile.

This couldn’t be further from the truth. LRTs and LSTs are entirely different primitives. For those familiar with traditional finance, the distinction can be compared to this: LSTs are like passively managed vehicles, such as an ETF fund, where the risk is homogeneous. Every protocol manages the staking of the same fungible underlying ETH, just as ETFs reflect the volatility of their underlying indexes. In contrast, LRTs are more akin to hedge funds, dealing with heterogeneous risk factors like assessing specific AVS risks—such as inflation rates, slashing conditions, and technical risks—while also supporting various collaterals and handling AVS payments in different currencies. Additionally, there’s differentiation based on the underlying restaking platform (e.g., EigenLayer, Symbiotic etc) that each LRT supports.

EigenLayer LRTs deposits over the year, *Source*: Parsec

Liquid Restaking Protocols act as intermediaries between the two main restaking participants: Restakers and Operators. LRTs serve as distribution partners for Operators and Restaking Platforms, managing capital allocation and controlling their relationships on both ends of the restaking spectrum, which grants them significant power within the ecosystem. The LRT market operates differently from the LST market, which is currently dominated by a single player, Lido, with stETH gaining monetary-like characteristics and competing with native Ether for base-money status. In contrast, LRTs need fully developed ecosystems to attract capital to their platforms. This is why many protocols are pursuing vertical integration, such as Etherfi launching multiple investment products like DeFi strategies and a credit card service, Swell developing an L2 with a restaking token used as gas, and Puffer’s UniFi, which aims to unify all L2s with a based rollup. LRTs also face the challenge of aligning the amount and duration of capital with the security needs of each network. They work closely with AVSs to determine the precise shared security requirements for each network. The key considerations are how much security an AVS needs and for how long. This is crucial because no network wants to experience significant security volatility or overpay for more security than it actually requires.

As we can see, there is tons of variety in the LRT sector. The table below aims to illustrate the differences between the core Liquid restaking Protocols:

Restaking Platforms You May Not Know About

Restaking is quickly becoming a crowded playing field, with new projects emerging nearly every month, each aiming to tackle the industry’s bottlenecks in unique ways. Here’s a list of some notable mentions:

Karak Network

Karak is currently the 3rd largest restaking platform by TVL, with around $800M at the moment. It has gained significant traction and support within the crypto-DeFi-focused community. Karak Network stands out by accepting the most diverse set of collateral, including LSTs, stablecoins, ERC20 tokens, and even LP tokens. Collateral can be deposited across multiple chains, such as Arbitrum, Mantle, BSC, and others. In Karak’s ecosystem, networks that provide security are known as Distributed Secure Services (DSS). These DSSs are highly customizable and come with built-in support for streamlined development. Karak’s tech stack also includes a risk management L2 called K2, which serves as a sandbox for DSS builders.

Exocore

Exocore tackles fragmentation in restaking with an Omnichain approach. Rather than confining security to a single chain, Exocore aggregates crypto-economic security across multiple chains to secure AVSs. It operates as an L1 for restaking, managed by a network of validators, which sets it apart. Exocore claims its primary advantage is handling complex staking logic at the protocol level, which significantly reduces smart contract vulnerabilities and lowers user risk.

Nektar Network

Nektar is yet another player in the restaking space, backed by a team with deep experience in the staking industry. Prior to launching Nektar, the team developed the Diva LST protocol, pioneering Distributed Validation Technology (DVT). Now, building on the Diva tech stack, Nektar markets itself as Resilient restaking, focusing on decentralization through Diva’s fully distributed validation process. This approach reduces the centralization risks linked to proprietary tokens and promotes a more balanced network of validators. Nektar has also announced its first cohort of restaking vaults, powered by Angle Protocol and Re7 Capital.

Verio

Verio is the latest addition to the scene, launching with the momentum of Story Protocol’s impressive Series B raise. With the motto “IP restaking,” Verio is positioned as the staking hub for Story Protocol, offering a dual-staking model that combines liquid staking with IP restaking. Users can stake IP assets to receive vIP tokens, which earn yield while keeping their capital liquid. These vIP tokens can then be restaked on specific IP assets to earn additional rewards. By validating the legitimacy of new IP assets, Verio via IP restaking drives overall interest in the Story Protocol itself, potentially generating a flywheel effect that increases licensing fees and royalties for IP owners.

3. Bitcoin Staking And Babylon

Until recently, Bitcoin holders looking to participate in DeFi had to rely on wrapped versions like wBTC, which limited their liquidity options. Using wrapped Bitcoin requires trusting an intermediary to issue the asset and maintain a 1:1 peg with Bitcoin. While this innovation was important, it came with trade-offs, such as the inability to use BTC natively on the Bitcoin network, the most secure way to hold it. However, recent advancements in Bitcoin staking now allow BTC holders to secure proof-of-stake blockchains by staking their assets directly on the Bitcoin network. This means users can now leverage Bitcoin’s crypto-economic security to secure PoS networks exclusively built on the Bitcoin network.

If you’re curious about how Bitcoin staking and liquid staking work and want an in-depth look at Babylon’s design, be sure to check out our comprehensive Bitcoin Staking Landscape!

Babylon Staking Protocol in a Nutshell

Babylon is a shared security protocol that enables Bitcoin to be used as collateral within the PoS ecosystem, allowing BTC to secure PoS chains without relying on non-native BTC assets held on a PoS chain. In the first deposit window, Babylon reached its initial cap with 1,000 BTC deposited. Its follow-up Cap-2 program has been an enormous success, attracting a whopping 23,000 BTC valued at $1.6B billion. Babylon can be compared to EigenLayer, but instead of rehypothecating ETH and ERC-20 tokens, it outsources Bitcoin’s economic security. Babylon operates as a two-sided marketplace, acting as a bridge by utilizing Bitcoin to secure PoS chains through staking. Its remote staking protocol offers robust security guarantees to both PoS chains (consumer chains) and Bitcoin holders (providers) through novel mechanisms like the Timestamping Protocol, Finality Gadgets, and Bond Contracts. Babylon’s Bitcoin Staking Protocol, with its modular design, can be applied across a wide range of consensus protocols used by consumer chains. Any blockchain network looking to leverage Bitcoin’s security and liquidity can benefit from Babylon. Currently, its use cases are similar to restaking platforms on other networks, such as DeFi, rollups, and oracle networks.

Bitcoin staking is a two-sided marketplace. *Source:* Babylon Litepaper

Bitcoin, often called “Digital Gold”, is the most valuable and secure cryptocurrency globally, known for its primary role as a decentralized peer-to-peer digital currency. Its strength comes from prioritizing simplicity and security over additional features. With Babylon, Bitcoin’s intentionally limited capabilities can now be greatly expanded to secure various networks, sparking what some are calling a “Bitcoin’s Renaissance”.

Bitcoin Staking Landscape

A substantial amount of Bitcoin is being actively allocated to Bitcoin Liquid Staking protocols built on top of Babylon. For instance, Solv, a leader in this space, holds over 24,000 BTC in reserves, equating to nearly $1.6 billion in liquidity. Additionally, PumpBTC’s Total Value Locked (TVL) has surpassed $200 million. Lombard has accumulated nearly 10,000 BTC in deposits. Other protocols, such as Bedrock, which bolsters the Bitcoin Liquid Staking ecosystem, boast an impressive $150 million TVL on the Bitcoin side. However, the Bitcoin landscape extends far beyond staking protocols, with numerous teams also working on Bitcoin-native L2s, DeFi protocols, wallets, and core infrastructure.

*Source*: Bitcoin Liquid Staking Landscape

Solv

SolvBTC is a token representation of Bitcoin held in Solv’s Decentralized Bitcoin Reserves, designed to enable Bitcoin liquidity to flow seamlessly across various chains. It provides crucial liquidity infrastructure for the Bitcoin-powered finance (BTCFi) ecosystem. Deployed on more than five major networks, including the Bitcoin mainnet, Ethereum mainnet, and BNB Chain, SolvBTC serves as a key liquidity provider with 24,000 BTC in reserves. This liquidity has attracted significant players in the DeFi space, such as the Bitcoin staking protocol Babylon, the Synthetic Dollar Stablecoin Protocol Ethena, and other projects.

Lombard

Lombard is committed to expanding the digital economy by transforming Bitcoin’s utility from a store of value into a productive financial tool. Individuals and large institutions can access LBTC to earn yields on idle Bitcoin or fully participate in DeFi ecosystems.

PumpBTC

PumpBTC serves as a liquid staking solution for Babylon, aiming to integrate DeFi into the Bitcoin ecosystem. With an ecosystem-centric approach supported by seasoned DeFi experts and industry-leading partners, PumpBTC simplifies collaboration between users and Babylon. Users can stake into Babylon with a single action through PumpBTC, receiving liquidity tokens immediately without any waiting periods.

pSTAKE

pSTAKE Finance allows users to liquid stake BTC and earn rewards from Babylon’s Trustless BTC staking, providing security for other app chains while maintaining liquidity. Powered by institutional custody providers like Cobo, pSTAKE Finance offers expertly curated yield strategies, enabling individuals and institutions to maximize the potential of their BTC within the BTCFi ecosystem.

BabyPie

BabyPie offers BTC holders the opportunity to enhance their rewards and flexibility through liquid staking. By depositing BTC on BabyPie, users receive mBTC in return and can validate new systems via Babylon.

Bedrock

Bedrock is a multi-asset liquid restaking protocol backed by a non-custodial solution, developed in partnership with RockX. Bedrock provides products such as Liquid Restaking Tokens (LRT) for Wrapped BTC, ETH, and IOTX.

Chakra

Chakra Network is a modular settlement layer designed to unlock Bitcoin’s liquidity across diverse blockchain ecosystems. Offering a high-performance, parallelized settlement solution, Chakra facilitates efficient liquidity flow across Layer 2s, AppChains, and native BTC assets.

Nomic

Nomic has introduced stBTC, a liquid staked Bitcoin token built on Babylon’s staking protocol. stBTC enables users to stake nBTC (Bitcoin on Nomic) via Babylon, providing proof-of-stake security for other chains in exchange for altcoin yields. Users staking Bitcoin through Babylon on Nomic earn both NOM and nBTC staking rewards, redeemable for BTC—a unique feature of the Nomic system.

4. Restaking on Solana

Up until now, most of this report has centered on Ethereum, Bitcoin and EVM networks. However, shared security is also gaining momentum within the Solana ecosystem. Solana has had a remarkable year, emerging from the bear market and solidifying itself as the strongest contender to Ethereum’s position as the go-to blockchain settlement layer. As with Ethereum, on Solana Staking is also one of the most important DeFi sub-categories. However, Solana follows a different set of core dynamics. It uses a delegated Proof-of-Stake mechanism at the protocol level, enabling users to stake natively by delegating to validators, instead of managing their own node.

The ease of native staking through Solana’s built-in delegation mechanism may help explain the significant gap between Solana and Ethereum in terms of staked versus liquid staked assets. Solana boasts $50 billion in staked capital, holding strong in comparison to Ethereum, but it lags behind in liquid staking. While 55% of staked ETH is in liquid form, only 8% of Solana’s staked SOL is held in liquid staking tokens (LSTs), presenting a clear growth opportunity for Solana. Before diving into Solana’s restaking flow, it’s worth highlighting the current landscape of liquid staking on Solana. Despite slower adoption, as Liquid Staking isn’t the only way for non-technical users to access staking yield like on Ethereum, LSTs has still reached critical mass on Solana. Jito and Marinade Finance dominate Solana’s liquid staking, holding over 70% of all SOL in LSTs. Sanctum is also worth mentioning, as it follows a similar model to Mellow Protocol, allowing third-party entities to create and launch their own SOL Staking derivatives. Behind the scenes, sanctum addresses liquidity fragmentation by offering stable conversion rates through its Infinity Pool and provides an easy withdrawal process for these derivatives.

Liquid Staking landscape on Solana, *Source*: dune

Now that we have a solid understanding of Solana’s Staking land, let’s dive into the innovations Solana Mantlets are developing on the restaking front. Solana’s unique architecture opens the door to a new paradigm for AVSs. One standout feature is Solana’s stake-weighted Quality of Service (swQoS), which introduces a new way to divide restaking services. SwQoS rewards validators with over 15k SOL by granting them access to transaction fastlanes, enabling faster delivery to block leaders. This results in two categories of AVSs: endogenous and exogenous.

Endogenous services enhance faster transaction speeds for specific protocols. For example, a dApp could use a restaking layer to manage staked tokens and achieve faster transaction processing for its own operations. On the other hand, exogenous services are those we’re quite familiar with in the Ethereum land, like using outside capital to secure an oracle network – in short, applying restaked capital for out-of-protocol purposes. This further validates the idea that restaking on Ethereum and Solana could follow different long-term market dynamics.

So far, there are four major restaking providers on Solana. Here’s our quick rundown of who’s best positioned to win the competition.

Jito

It’s hard to find anyone who doesn’t recognize Jito as one of the strongest teams driving Solana forward. Originally dubbed “Solana’s Lido and Flashbots in one”, Jito has dominated the chain’s LST market with its yield-bearing $jitoSOL, while also building its own Solana client. Jito client has played a crucial role in mitigating extractable value on the network, achieving massive adoption with up to 80% of Solana’s dominance, and leading to a significant rise in Jito validator tips throughout this year. But that’s not all—Jito continues to innovate, with the progressive launch of StakeNet, an automated stake pool manager, and the rapid development of the protocol’s governance.

The Jito Foundation’s latest major venture is none other than restaking. Jito restaking is a multi-asset staking protocol for AVSs, which they refer to as node consensus networks (NCNs). The setup boasts modularity, allowing NCNs to customize the operators and vaults they support, while operators can tailor the NCNs they stake to and the vaults from which they receive delegations. The restaking program also issues vault receipt tokens (VRTs), which are SPL tokens representing a pro-rata share of assets in the vault. VRTs enhance liquidity, composability, and interoperability with other Solana programs.

With Jito commanding a large share of the LST market, the protocol has a built-in user base that can easily be encouraged to leverage their staked capital further. On the partnership front, Jito has attracted skilled teams like Renzo, Squads, Switchboard, and Fragmetric. However, having already achieved significant growth and executed an airdrop, Jito may not have the same capacity as newer protocols to offer direct incentives to attract fresh users. Instead, Jito’s strategy might focus on dogfooding its restaking adoption by integrating it with its existing Solana client services. This could lead to the creation of an endogenous MEV channel with swQoS, offering fast transaction lanes and recapturing MEV revenues, or potentially launching exogenous MEV services similar to MEV-Boost on Ethereum.

Overview of the Jito Restaking Ecosystem, *Source*: Jito

Solayer

Solayer is emerging as the strongest contender to challenge Jito’s dominance, having recently raised $12M in a seed round led by Polychain Capital. Since its official launch in May, Solayer has posted impressive stats: $200M in TVL, over 100k unique deposit addresses, and a Mainnet launch ahead of Jito, with AVSs like Bonk, SonicSVM, and HashKey already onboarded. Solayer focuses on maximizing returns for Restakers by offering multiple yield streams, including native SOL staking, MEV-boost, and AVS yield. It also prioritizes optimizing swQoS blockspace for AVS. Currently, its solution is limited to native SOL and LST deposits, whereas Jito plans to support various SPL tokens for economic security, which could be a significant advantage. However, Solayer has a few tricks up its sleeve: recently announcing a partnership with Binance to launch a BNSOL derivative, along with a yield-bearing SUSD stablecoin in collaboration with Open Eden Labs.

Cambrian

Another skilled team building restaking infrastructure for Solana to reduce costs, improve developer experience, and enhance resource allocation for shared security beneficiaries. Instead of solely competing with other providers, Cambrian’s edge lies in acting as complementary middleware. They focus on solving restaking layer fragmentation by building an orchestration layer that automates AVS control strategies. This allows builders to effortlessly manage capital distribution across nodes, lowering the barrier for dApp developers to navigate the complexities of building as an AVS. Cambrian aims to mirror the role of RaaS (Rollup as a Service) providers during the L2 boom, capitalizing on the rising demand for shared security while maintaining control through its restaking rails – giving them a foothold to retain control over direct relationships with all key actors. The platform’s initial Testnet launch is expected this quarter.

Picasso

Initially focused on seamless interoperability between Solana and Cosmos, Picasso has evolved into a full-fledged restaking hub, supporting projects that want to outsource their economic security to the Solana network itself. One standout project using Picasso’s restaking layer is Mantis, an in-house rollup on Solana. Leveraging the Cosmos SDK framework, Picasso not only connects IBC-enabled chains, enhancing their utility and security, but also serves as a generalized restaking hub. This omnichain restaking layer pools liquidity from interconnected ecosystems to provide a more robust shared security experience. It allows SOL and its LSTs to be rehypothecated across AVSs that may not be directly aligned with the Solana ecosystem but still value SOL’s asset properties.

5. Oracles in the Restaking Puzzle

Now that we have a solid understanding of just how vast the restaking ecosystem is, it’s clear that there are plenty of builders on all sides of the market, eager to create innovative products with this new technology. But no one wants to build in isolation. A core value of DeFi’s flywheel effect—interoperability—remains unchanged. Growth isn’t just about serving customers within a single dApp, but also enabling other builders to build on top of your contracts and native assets, often referred to as DeFi legos. This is where the need for an impartial entity comes in, one that specializes in pricing assets and distributing those quotes across multiple networks. Yes, we’re talking about oracle providers.

If you look closely, one of the greatest strengths of the restaking industry, its diversity and broad competition, also poses a challenge: the substantial need to accurately price a new category of crypto assets with different economic and technical properties. This calls for a bottom-up evaluation framework, which we’ll dive into in the next section. For example, consider the sheer number of Ethereum’s LRT projects—there are over a dozen competing for a slice of Ethereum’s restaking pie. These LRTs are just the tip of the iceberg for restaked derivative assets. The market for restaking derivatives is growing rapidly, with products like Pendle’s yield abstraction and Ebisu’s stablecoin backed by restaked assets. Each of these projects requires accurate price feeds for their underlying products, which in turn boosts utility, strengthens liquidity, and creates new markets for their branded tokens.

Oracles For Pricing Restaked Assets

As previously touched on, staked and restaked assets follow completely different dynamics compared to conventional crypto assets like vanilla Bitcoin or Ether. Here are some of the main distinctions:

On-chain market price discovery (based on DEXes)
Liquidity is the key price stability mechanism, not Volume
Advanced price modeling, i.e. fundamental price feed (exchange rate)

Now, let’s dive deeper into why this is the case. Let’s use Ethereum’s LRT derivatives as an example below to better illustrate the case.

On-Chain Price Discovery

Since restaking is truly DeFi-native, so are its outcomes. Let’s look at LRTs: the vast majority of LRT derivative trading volume occurs on-chain. Even for market leaders like Ether.fi’s eETH or Renzo’s ezETH, these tokens are not listed on centralized exchanges, meaning all price discovery happens directly on the chain where they were issued. This means that to accurately price these DeFi-native assets, DeFi-calibrated tools are required. In RedStone’s case, this involves tapping into DEX liquidity to retrieve the most precise exchange rate for a given block, directly from the smart contract ratio.

Priced by Liquidity, Not Volume

Many yield-bearing assets, including Restaked assets, are not primarily designed for trading but rather for holding by protocols and individuals. They provide a simple way to gain exposure to both staking and restaking yields. Even for large LRTs, trading volumes are often too low to qualify for enterprise-grade data providers, which rely on traditional finance methods like volume weighting. However, the significant liquidity in incentivized on-chain pools serves as a strong foundation for a DeFi-first pricing model. Rather than relying on volume-based evaluations, which can be prone to wash trading in long tail assets, a more suitable approach is slippage-based weighting. This method monitors the skewness between DEX trading pairs, providing a more accurate reflection of asset value.

Advanced Price Modeling

Let’s say you’re a die-hard Ether.fi bull and decide to deposit a hefty amount into Gearbox’s weETH leverage farming vault. In this scenario, nailing the precision of the weETH/ETH ratio is critical to keeping your assets safe. But here’s the challenge: defining the “right” ratio isn’t as clear-cut as it sounds. You could go with an aggregated market quote for weETH across relevant venues and update the ratio accordingly. But if your risk tolerance (or degen level) is cranked up high and you’re leveraging close to the liquidation point, even a minor market fluctuation lasting just a few seconds, or more precisely a few blocks, could push you into liquidation. On the other hand, you might consider a more fundamental approach, using a contract-based ratio that reflects how many units of Ether are locked in Ether.fi’s contracts relative to weETH issuance. This would certainly reduce the risk of short-term market manipulation but may not be the perfect solution for every situation. For example, if Ether.fi withdrawals were disabled, it might make sense to apply a discount to weETH tokens during a black swap event.

Building on that, you could take it a step further by implementing a hybrid approach—combining both the market rate and a fundamental rate. This could include taking periodic snapshots of the contract ratio, blending it with the market rate, and triggering alerts whenever the deviation between the two exceeds a certain threshold. Alternatively, instead of relying on real-time market quotes, you could smooth out the volatility using TWAP (Time-Weighted Average Price) rates.

You see where this is heading—there’s a lot of complexity involved with all these underlying factors. At the same time, there’s significant room for innovation when it comes to pricing this new and rapidly growing restaked asset class.

At RedStone, we’re incredibly proud to be leading the charge in this innovation. We’re working closely with top-tier industry partners to establish the highest security standards and positioning ourselves as a market leader in pricing yield-bearing assets like LST and LRT tokens.

Restaking Securing Oracles

There are countless ideas for leveraging shared security to build applications that were previously impossible. However, a significant aspect of restaking is enhancing the security of existing protocols, enabling them to scale almost arbitrarily without compromising security, while also decentralizing in a more economically sustainable way. There seems to be a consensus that securing oracle networks through restaking is one of the most accessible and impactful low-hanging fruits to seize.

Why would an oracle need restaking security? Let’s review just one use case that RedStone utilizes shared security for new capabilities.

For an in-depth look at restaking in the context of RedStone, be sure to check out our Docs on how RedStone leverages EigenLayer!

RedStone Push Model AVS Implementation

The RedStone AVS solution introduces a novel implementation of the Push model for delivering data to the blockchain. Traditionally, an off-chain relayer collects data and sends it to the network, where the validation process takes place. This method, while effective, often resulted in higher data usage on-chain due to the need for comprehensive validation processes. With AVS, validation is moved off-chain, significantly gas consumption. In this model, the price data collected from oracle nodes undergo rigorous off-chain validation to ensure its accuracy and consistency. The validation process includes checking digital signatures to confirm data authenticity. Once complete, the median price and timestamp are verified by AVS operators to ensure the calculations are untampered. After validation, the results and signed confirmations are sent to the blockchain.

On-chain, only the aggregated BLS signature from AVS operators is verified. This process greatly enhances the scalability of the solution, as it allows data to be gathered from an unlimited number of oracle nodes. In the traditional model, the relayer selects a subset of prices near the median to send to the blockchain. With the AVS approach, only the final median price and timestamp are submitted, so gas consumption remains low regardless of the number of oracle nodes. This method reduces on-chain costs and allows the system to handle more data inputs without sacrificing efficiency.

This is just one of several restaking implementations we’re exploring to boost resiliency and service quality. Another area we’re actively investigating is increasing data manipulation costs in the RedStone oracle network by leveraging shared security within Data Aggregation Module. Our team is leading research at the intersection of restaking and oracles, collaborating with industry leaders like EigenLayer, Symbiotic, Othentic, and others to maximize value and open-source our learnings.

6. The Future of Restaking: What’s Ahead?

With so much talent currently focused on restaking, it’s clear there will be a lot to unpack in the coming months to stay current. Here are a few of our predictions on what will spark excitement around shared security from within the ecosystem.

Permissionless Token Support

We’ve become familiar with deriving shared security from native assets like Ether, and more recently BTC, SOL, and their highly correlated equivalents like LSTs. However, the question of supporting permissionless tokens—allowing any arbitrary crypto asset—remains more open. This trend is now being embraced by major restaking platforms such as EigenLayer, Symbiotic, Karak, and Jito. On one hand, this significantly broadens the range of assets that can contribute to decentralized network security, unlocking the cryptoeconomic potential of arbitrary tokens. In theory, this enhances alignment and connectivity across the ecosystem, bringing us closer to the goal of seamlessly abstracting the security layer to meet diverse needs. It also allows each AVS to have its own distinct security profile, derived from any combination of tokens, and enables AVSs to use their native tokens as a source of cryptoeconomic security—potentially creating flywheel effects that were previously unattainable. On the other hand, it’s still a relatively new concept, and for most restaking platforms, it remains an idea yet to be fully implemented in practice. Additionally, the potential for exploitation needs careful evaluation, as the attack surface could be much larger. Native blockchain assets tend to be more substantial than other tokens, which could create more opportunities for economic exploits.

Slashing

Slashing, the process of penalizing a validator for misbehavior, is a crucial part of the restaking model. Slashing is like the now-trendy prediction markets for expressing ideas. It’s easy to share opinions online about anything, but unless your reputation is on the line, it doesn’t carry the same weight as ‘putting your money where your mouth is.’ Similarly, restaking will have its ‘moment of truth’ once the leading competitors, who are racing to bring it first to the market, release their solutions. Only then, after time has battle-tested them, will we see if restaking lives up to the high expectations. EigenLayer is teasing that its implementation is around the corner, Symbiotic’s product is already on devnet and team is expecting the launch in Q4, and others are cooking up behind the scenes.

Incentive Wars

Restaking might not result in a “winner-takes-all” scenario, but there certainly won’t be many platforms with a long-term, sticky user base. This is where a protocol’s incentives can be crucial. Historically, the right use of incentives has reshaped the DeFi landscape, as seen in the Curve Wars or, conversely, what can happen when incentives are less well-planned, as demonstrated by the now-legendary DeFi Summer. We’re already seeing signs of similar competition among shared security platforms, especially with the careful research and due diligence behind EigenLayer’s first version of Programmatic Incentives. For reference:

“At least 4% of EIGEN’s total supply will be distributed to stakers and operators via upcoming programmatic incentives.These incentives will be distributed via “rewards-boosts” in which stakers and operators will receive EIGEN in proportion to the amount of rewards distributed to them by AVSs.”

It’s hard to imagine that every staking player won’t try to create their own version of protocol incentives. We might soon witness an avalanche of threads, with calls for “Restaking Wars” flooding the timeline.

AVS Becoming Reality

This feels like an inflection point where restaking is shifting from a “cool theoretical concept” to a standard setup for crypto-economic protocols. Numerous protocols have been building for over a year, and their work is nearly ready to be unveiled to the public.

EigenDA’s first iteration is already live, and many others, including AltLayer, Witness Chain, Lagrange, and us at RedStone, have also launched the first, though permissioned, versions of AVS products or are nearing Mainnet launches. Soon, we’ll witness the launch of AVS from other restaking providers, leading to a Cambrian explosion of restaked security being used in practice!

7. Conclusions

Our team has been researching restaking since its inception, and a few things are clear: constant innovation and intense competition are here to stay. Restaking began as a way to build better, decentralized products, enabling new paradigms and enhancing existing protocols. Now, we see many restaking platforms converging toward similar end goals. It’s incredibly exciting to think how the restaking ecosystem and its dynamics will evolve over the next few years.

And if you’re heading to Thailand for DevCon, make sure to add the Staking Summit to your bucket list. See you there!

Restaking Report: The Ultimate 2024 Market Overview