Social Restaking

Social Restaking is a decentralized trust mechanism that extends the security of a base blockchain's staked assets to new protocols without requiring the physical transfer or re-locking of those assets. It allows a staker to issue a verifiable, on-chain attestation—a social restaking credential—that signals their endorsement and economic backing of a specific application or service. This credential is a cryptographic commitment, often implemented as a non-transferable token (NFT) or a soulbound token, representing a staker's reputational stake in a secondary network.

The core innovation is the separation of physical staking (assets locked in a consensus protocol like Ethereum's Beacon Chain) from virtual staking (the delegated trust and slashing risk). A staker on a primary chain, such as Ethereum, can socially restake their ETH position to back the security of an actively validated service (AVS), like a data availability layer, oracle network, or sidechain. The AVS can then design its cryptoeconomics to penalize malicious operators by slashing the reputation or delegated value associated with the social restaking credential, creating a strong disincentive for misbehavior.

This model creates a trust network where new protocols bootstrap security by aggregating the social capital and economic weight of established validators. Key technical components include a registry for issuing and managing credentials, a delegation layer where AVS operators can be assigned staker endorsements, and a slashing mechanism defined by the AVS to penalize bad actors. Unlike liquid restaking, no liquidity-providing token (LRT) is minted; the staker's underlying assets remain untouched in their original staking contract.

The primary benefit is capital efficiency and permissionless innovation. Developers can launch secure services without requiring validators to move or split their stake, while stakers can support multiple ecosystems simultaneously, earning additional rewards for shouldering slashing risk. However, this introduces correlated slashing risk across multiple AVS and the complexity of managing reputational exposure, making operator selection and risk assessment critical for participants.

Prominent implementations include EigenLayer's Delegated Slashing model, where stakers delegate their restaking credentials to operators. Use cases are vast, ranging from securing new consensus layers and decentralized sequencers to enhancing the security of bridges and oracle networks. Social Restaking fundamentally redefines how blockchain trust is composable and exported, creating a marketplace for decentralized security.

At its core, social restaking is a delegation mechanism built on top of a restaking protocol like EigenLayer. A user, or restaker, deposits a liquid staking token (e.g., stETH) or native ETH into a restaking contract. Instead of directly selecting and managing individual AVSs, the restaker delegates their stake's security to a trusted third party called an operator. This operator is a node operator who runs the necessary software to validate and secure the external networks (AVSs). The restaker's delegated stake provides the economic security and slashing guarantees for all the services the operator chooses to secure.

The operator's role is central to the model. They perform the technical work of running nodes, signing attestations, and maintaining uptime for the AVSs they opt into. In return for this service, they earn rewards from those AVSs. A portion of these rewards is then shared with the restakers who delegated to them, creating a yield stream. This creates a principal-agent relationship where the restaker's economic stake backs the operator's actions. If the operator acts maliciously or goes offline, the protocol can slash the delegated stake, penalizing both the operator and the delegating restakers proportionally.

This model introduces a social layer of trust and curation. Restakers must perform due diligence on operators, assessing their technical reputation, performance history, and the risk profile of the AVSs they support. Platforms and Delegated Restaking Protocols (DRPs) often emerge to aggregate this information, curate operator sets, and simplify the delegation process for users. This social dynamic separates capital provision from technical execution, allowing for specialization and scalability within the restaking ecosystem.

The flow of value is a key outcome. AVSs pay rewards in their native tokens or ETH to operators for security. Operators take a commission and distribute the remaining rewards to their delegators. This allows restakers to earn additional yield on top of their base Ethereum staking rewards by providing security to a diversified portfolio of services, from new L2s and oracles to cross-chain bridges and co-processors, all through a single delegation action.

Social restaking's security model is non-exclusive and multiplicative. A single unit of restaked ETH can secure multiple AVSs concurrently through its delegated operator, amplifying its economic utility. However, this also creates correlated slashing risks; a failure in one AVS can lead to slashing that affects all restakers delegated to that operator, even for AVSs they did not directly choose. This interlinked risk profile makes operator selection and AVS risk assessment critical components of the social restaking process.