Introduction to Restaking
Restaking is an innovative concept in blockchain technology that allows validators to reuse their staked tokens to provide additional services and earn rewards without unstaking from the original network. This enhances the efficiency and utility of staked assets.
In a typical proof-of-stake blockchain, validators lock up (stake) tokens to participate in block production and earn staking rewards. Those staked tokens cannot be used for any other purpose. Restaking changes this by enabling those same staked tokens to be "restaked" to provide other services and earn additional rewards on top of the base staking rewards.
This is achieved by the validator opting-in to restake a portion of their staked tokens into a restaking protocol or application. The staked tokens still remain staked on the original chain and earn their base rewards. But they are now also being used to provide security, computation, or other services to the restaking protocol, allowing the validator to earn additional restaking rewards.
Benefits of restaking include:
- Increased efficiency of staked capital
- Additional revenue streams for stakers
- Boosted security for restaking protocols by leveraging security of the underlying chain
- Innovation in new blockchain services by harnessing decentralized resources
How Tangle Network Uses Restaking
Tangle Network has implemented a unique restaking system to allow its validator set to provide multi-party computation (MPC) services to power advanced cryptographic applications. This is referred to as MPC-as-a-service (MPCaaS).
Active Tangle validators can opt-in to restake 50% of their staked TNT tokens to provide MPC services such as threshold signatures, zero-knowledge proofs and more. In return, they earn service fees and additional inflation rewards on top of their base validation rewards.
Here's how it works:
- Validators create a restaking profile by allocating their restaked TNT to specific MPC service roles they want to provide (e.g. signing, proof generation, etc.)
- Developers/users can request MPC services from Tangle's restaked validators for a fee. Requested jobs are assigned to restaked validators.
- Validators must complete the MPC jobs they are assigned. Failure to do so results in slashing of their stake.
- Participating validators earn the service fees and proportional inflation rewards based on their restaked amounts and jobs completed.
This restaking model allows Tangle to offer unique MPC services powered by its decentralized validator set. Developers can leverage these services to easily deploy advanced cryptographic applications like trustless cross-chain bridges, privacy solutions, identity systems and more.
By restaking, Tangle validators gain additional revenue, the network gains efficiency from its staked supply, and the ecosystem gains access to powerful new primitives to fuel innovation. Restaking helps align incentives and harness the security of the underlying proof-of-stake blockchain for exciting new use cases.