can someone who understands this much better than me show me how restaking doesn't totally turn a decentralized system into a fragile one vulnerable to cascading risk

ceo @ helius.dev, host @ lightspeed, ex coinbase — wartime shitposter

The long and short of it is that restaking is not the same as rehypothecation. Rehypothecation makes you vulnerable to market risk, which is an exogenous risk that you can't control. Slashing is an endogenous risk, it's 100% in your control not to sign two blocks at the same height.

Software Engineer @ Cadence Design Systems. B4: Stanford EE / Illinois ECE

What about added smart contract risk? If Eigenlayer manages 40% of all staked ETH and either itself or another entity using restaked ETH has a hiccup suddenly 40% of staked ETH could be gone.

Director of Operations at Hats.Finance, a decentral platform for Audit Competitions and Bug Bounties. 

For the technology a 30% slashing should be fine but from a financial standpoint it would be devastating no matter if 30% or 40% is lost.

True, but Lido has just under 30% of stake. The same people concerned about Eigenlayer restaking also seem to be weirdly against ringing the alarm on LSTs.