How much should you pay for restaking security?

TL;DR

This paper models the security needs of restaking protocols, showing that strategic incentives can prevent cascading failures and that proper incentive design can achieve desired security levels.

Contribution

It extends existing models to include strategic attackers and incentives, providing an approximation algorithm for security-based incentive allocation in restaking protocols.

Findings

Strategic incentives can prevent large-scale cascading failures.

Proper incentive management achieves targeted security levels.

Restaking protocols can be secure with appropriate incentive design.

Abstract

Restaking protocols have aggregated billions of dollars of security by utilizing token incentives and payments. A natural question to ask is: How much security do restaked services \emph{really} need to purchase? To answer this question, we expand a model of Durvasula and Roughgarden [DR24] that includes incentives and an expanded threat model consisting of strategic attackers and users. Our model shows that an adversary with a strictly submodular profit combined with strategic node operators who respond to incentives can avoid the large-scale cascading failures of~[DR24]. We utilize our model to construct an approximation algorithm for choosing token-based incentives that achieve a given security level against adversaries who are bounded in the number of services they can simultaneously attack. Our results suggest that incentivized restaking protocols can be secure with proper incentive management.