Quote from: aima55 on October 11, 2024, 10:10:45 AM

Guys, it seems like restaking protocols are becoming the biggest narrative in ethereum.

Before, I used to be so much confused about staking, restaking, liquid staking concepts. But when I used them, it was clear.
I have been smashing my head with this eigenlayer narative for about 4 months now mainly on puffer, an Ethereum liquid restaking protocol built on EigenLayer. Being on the puffer boat for a while and looks like they have something for the community. Thou, i still cant decide if i want to put my eth into all of these restaking contracts.

Anyways, i’ve been thinking about this lately, is Restaking good or dangerous for the Ethereum ecosystem. I read about it somewhere last time that If anything goes wrong with restaking, it could have spiral effect and could devastate the price of ETH.

Definitely, it's going into a new break. It's cool to see innovation on EigenLayer by protocols like Puffer, as far as I understand that. Recycling is more of a two-way street regarding opportunities and risks. It's going to make Ethereum more secure and governable by allowing the spoilers to expand their role to many layers, probably to the benefit of the whole ecosystem. Now, there's a new source of income for the bettors. This makes betting kind of interesting.

However, I do take seriously your risk apprehension. If, for example, it ever breaks the protocol or suffers through some other devastating disadvantage, what you said is true. This is because reset uses the ETH that was locked to secure multiple protocols. Failure in the reset volume will impact the Ethereum base if the protocols with the bad outcome are higher; the same implications apply for validators and network stability in both cases.

I would recommend that any investor contemplating reinvesting should be aware of such risks and use only such amounts of ETH as commensurate with their risk tolerance. Variation between different types of bets: liquid betting traditional betting and new bets may be one way to achieve a balance of risk and reward.

Quote from: X-ray on Today at 02:24:37 AM

The weak point of restaking protocol is their TVL become so big solely because people seeking their TGE, but if the APR continues to be attractive it can pretty much continue to have high TVL though user retention might be decreasing.
restaking protocol like Puffer will probably have their TVL decrease a lot once TGE goes live which is tomorrow, probably. that can be a concern for depegging but speaking from experience, none of the previous restaking protocol have that much serious depegging. usually it depegs a little bit and then go up again, a subject for speculation for people who know what's gonna happen. but at the end of the day it depends on the mechanism of withdrawal, if it's 1:1 through withdrawal function enabled by the team, there won't be depegging at all.

but yeah it's the biggest narrative, I can even say it's the glue that keeping the ethereum blockchain to be as active as it is right now. literally everyone I know that holds ETH, restaked their ETH.

You are absolutely right about the popularity of TVL with TGE and high APR. This is fascinating as the incentives and the money tied to these are a lot, but may gain momentum once the rewards start to erode. The downtrend potential of TVL in Puffer with TGE would need to be watched closely, especially if the employees start resigning, their salaries cut short. That you mentioned As long as the delete mechanism works properly and stays 1:1, it would be able to mitigate any serious concerns around depex. However, the logical nature of those protocols always adds that bit of extra risk.

What really supersedes me is how a new breakout can come about in the long term. If the protocol will be able to maintain an attractive APR Those protocols had the ability to maintain TVL, but maybe it will be a shift towards a more sustainable model. You keep citing the fee as you mentioned. But for me, this is a massive break for Ethereum now. How long that narrative can sustain itself without causing some level of disruption n has yet to be determined.

I believe the holders of ETH, and those who are newly accumulating capital, should consider the potential returns against the risks; especially with the rates of growth that have recently happened.