Dual-Staking vs Re-Staking: Choosing an AVS Security Model

Isolated Risk Model: Security is siloed per network (e.g., Cosmos Hub, Celestia). A slashing event on one chain does not cascade to others. This matters for sovereign app-chains and protocols requiring maximum security independence, like high-value DeFi hubs (e.g., dYdX Chain).

Clear Incentive Alignment: Rewards and penalties are directly tied to a single chain's performance. This reduces complexity for validators and delegators. This matters for teams prioritizing predictable, auditable staking economics and avoiding the systemic risks of pooled security.

Leverage Existing Stake: A single staked asset (e.g., ETH) can secure multiple services (e.g., EigenLayer AVSs, Oracles, Bridges). This matters for maximizing yield on locked capital and bootstrapping security for new protocols without new token issuance.

Instant Access to Billions in Security: New protocols (like AltLayer, EigenDA) can tap into Ethereum's established validator set and economic weight from day one. This matters for rollups, oracles, and middleware needing robust, trust-minimized security without a native token.

Ideal for: Sovereign chains (Cosmos SDK, Polygon CDK), high-value L1s, and applications where a security breach must be contained. Example: An institutional DeFi chain cannot afford correlated failure from an unrelated oracle slashing.

Ideal for: Ethereum-aligned middleware, shared sequencers, proof systems, and teams launching services that benefit from Ethereum's deep security pool. Example: A new ZK-proof marketplace using Ethereum validators for fast, decentralized attestation.

Re-uses staked capital: Secures multiple services (AVSs like AltLayer, EigenDA) with the same ETH stake. This matters for validators and liquid stakers seeking maximized yield from a single asset, potentially earning fees from multiple protocols simultaneously.

Bootstraps security for new chains: Provides a shared security pool from Ethereum's ~$100B+ staked ETH. This matters for rapidly launching L2s, oracles (e.g., eoracle), and middleware without needing to bootstrap a new token's security from scratch.

Single-purpose security model: ETH is staked solely to secure the Ethereum Beacon Chain. This matters for risk-averse institutions and protocols (like Aave, Uniswap) that depend on stable, predictable validator incentives and avoid additional slashing conditions.

Battle-tested infrastructure: Supported by established providers like Lido (30%+ staking share), Rocket Pool, and Coinbase. This matters for enterprise deployments requiring robust insurance (e.g., Ether.fi's eETH), deep liquidity, and proven node operator sets.

Introduces correlated slashing: A failure in an AVS (like a data availability layer) can lead to slashing across the Ethereum base layer. This matters for protocol architects who must model new, complex failure modes and contagion risks.

Capped base yield: Rewards are limited to Ethereum consensus + MEV. This matters for high-yield seekers who may find ~3-5% APR insufficient compared to potential dual-staking rewards from high-demand AVSs.

Separate security pools: Uses a dedicated, non-correlated asset (e.g., ETH + a native token) to secure the network. This creates a higher cost of attack, as an attacker must acquire and stake two distinct assets. This matters for new L1s or app-chains like Celo (cGLD/cEUR) or dYdX (v3's ETH/DYDX model) that require robust, sybil-resistant security from day one.

Independent economic policy: The protocol controls its own token's emission, staking rewards, and slashing conditions without external dependencies. This matters for foundations and DAOs that prioritize full control over their security budget and governance, avoiding the systemic risks of an external restaking provider's decisions.

High bootstrapping cost: Requires attracting and incentivizing liquidity for a new, often volatile, staking asset. This creates a significant cold-start problem, as seen with many newer chains struggling to achieve meaningful stake. This matters for teams with limited treasury who cannot afford massive token incentives to bootstrap a secure validator set.

Divided stakeholder alignment: Stakers of the native token and the paired asset (e.g., ETH) may have divergent interests, complicating governance. This matters for protocols seeking cohesive, long-term aligned communities, as seen in early governance disputes on networks with mixed staking bases.

Leverage existing stake: Allows staked ETH (e.g., from Lido's stETH, Rocket Pool's rETH, or native beacon chain) to be reused to secure additional services like EigenLayer AVSs, Oracles (e.g., eoracle), or Rollups (e.g., AltLayer). This unlocks ~$50B+ of idle security. This matters for bootstrapping middleware and L2s that need high security quickly without minting a new token.

Instant security from day one: A new AVS can tap into Ethereum's established validator set and slashing conditions, achieving credible security faster than recruiting a new validator set. This matters for rapidly deploying scalable infrastructure like shared sequencers (Espresso) or data availability layers, where time-to-market is critical.

Slashing correlation risk: A catastrophic failure or slashing event in one AVS could cascade to others sharing the same restaked ETH pool, creating "slashing contagion". This matters for mission-critical financial protocols that cannot tolerate exogenous failure modes introduced by unrelated services.

Power concentration: Large liquid staking providers (Lido, Coinbase) become de facto gatekeepers for restaking allocation, potentially centralizing the security of dozens of AVSs. This matters for architects prioritizing decentralization, as it creates a dependency on a small set of staking entities and their governance.