Valuation and Risk in Restaking Networks

Level: BA/MA/MAP
Responsible person: Benjamin Kraner
Keywords:  Ethereum, Restaking, Risks

This thesis will explore how restaking networks—where users commit their staked assets across multiple protocols—impact valuation models and risk profiles in Proof-of-Stake ecosystems. The research aims to (1) develop a framework to evaluate the financial incentives driving participants to restake, (2) identify unique risk vectors introduced by overlapping commitments, and (3) propose best practices for mitigating those risks. Methodologically, the study will combine quantitative analysis of on-chain data with simulation modeling of network dynamics. By examining price volatility, liquidity constraints, and slashing mechanisms across various restaking platforms, the research will assess how interconnected staking relationships might propagate systemic risk. The results are expected to offer insights into the long-term sustainability of restaking models and inform protocol designers, investors, and policymakers. Ultimately, this work will contribute to a deeper understanding of how emerging restaking ecosystems can influence broader decentralized finance markets.

References: 

Durvasula, Naveen, and Tim Roughgarden. "Robust Restaking Networks." arXiv preprint arXiv:2407.21785 (2024).

Chitra, Tarun, and Mallesh Pai. "How much should you pay for restaking security?." arXiv preprint arXiv:2408.00928 (2024).

Team, EigenLayer. "Eigenlayer: The restaking collective." White paper (2024)