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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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androidsixteen
@androidsixteen.eth
Rehypothecation is not a perfect analogy, but you can sub out credit risks of borrowers for various risks of the intermediary AVSs -- ie. do they have a poor implementation of the slashing conditions? I imagine AVSs will have more complex logic than just equivocation slashing
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Daniel Fernandes
@dfern.eth
Yes you can have extremely dumb slashing conditions. I could create a BOGO AVS that calls rand_int()%2 to determine whether you get slashed. In practice, (1) validators are already quite technical ppl and unlikely to signup for nonsense and (2) unlikely to sign onto AVS's that EL's veto committee won't underwrite.
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Daniel Fernandes
@dfern.eth
Even things like majority trust assumptions are iffy, lbut already in proof of stake, we do have unsaid majority trust assumptions, like the validator set could ignore your attestations and "inactivity leak" you out.
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