Elastic Restaking Networks: United we fall, (partially) divided we stand

Many blockchain-based decentralized services require their validators (operators) to deposit stake (collateral), which is forfeited (slashed) if they misbehave. Restaking networks let validators secure multiple services by reusing stake. These networks have quickly gained traction, leveraging over $20 billion in stake. However, restaking introduces a new attack vector where validators can coordinate to misbehave across multiple services simultaneously, extracting digital assets while forfeiting their stake only once.

Previous work focused either on preventing coordinated misbehavior or on protecting services if all other services are Byzantine and might unjustly cause slashing due to bugs or malice. The first model overlooks how a single Byzantine service can collapse the network, while the second ignores shared-stake benefits.

To bridge the gap, we analyze the system as a strategic game of coordinated misbehavior, when a given fraction of the services are Byzantine. We introduce elastic restaking networks, where validators can allocate portions of their stake that may cumulatively exceed their total stake, and when allocations are lost, the remaining stake stretches to cover remaining allocations. We show that elastic networks exhibit superior robustness compared to previous approaches, and demonstrate a synergistic effect where an elastic restaking network enhances its blockchain's security, contrary to community concerns of an opposite effect in existing networks. We then design incentives for tuning validators' allocations.

Our elastic restaking system and incentive design have immediate practical implications for deployed restaking networks.