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Restaking Meaning

Restaking is a new crypto-economic primitive that allows users to use their already-staked ETH to provide security for other applications at the same time. Pioneered by EigenLayer, restaking allows the "Economic Trust" that secures the Ethereum network to be "borrowed" by other protocols like oracles, data availability layers, or bridges.The technical mechanism involves granting a smart contract the power to Slash your staked ETH if you act maliciously on the secondary service you are securing.

For example, if you restake to secure a new bridge and that bridge finds you attempted to validate a fraudulent transaction, you lose a portion of your ETH. In exchange for this higher risk, you earn additional yield from the service you are securing, on top of your original staking rewards.Restaking solves the "Fragmented Security" problem.

Previously, every new crypto project had to create its own token and convince people to stake it, which was expensive and inherently insecure. By using "Restaked ETH," a new project can launch with the same security as Ethereum on Day 1.

However, this creates "Layered Risk"; if a bug in a small service leads to a massive slashing event, it could theoretically impact the overall security of the main Ethereum chain.

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