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mert
@0xmert
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
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Daniel Fernandes
@dfern.eth
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.
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Zach Rynes | CLG
@chainlinkgod
Most Eigen stakers will likely delegate their capital to third party operators, who then run the infra and choose the AVS’ on their behalf So while it may not be explicitly market risks, the concept is similar enough as an analogy, particularly when slashing risks are tied to external dependencies
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Daniel Fernandes
@dfern.eth
Maybe, but we already have Liquid Staking Tokens that suffer from the same principal agent problem. A solution here is just to pay solo stakers more, which is a outcome we could have when AVSs have more granular control over what validators they want to incentivize .
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