The Cost of Secure Restaking vs. Proof-of-Stake

TL;DR

This paper analyzes the capital efficiency of secure restaking versus traditional Proof-of-Stake protocols, deriving bounds on stake requirements and showing potential large savings with restaking.

Contribution

It introduces bounds on additional stakes needed for secure restaking to emulate PoS protocols and compares their capital efficiency, revealing significant potential savings.

Findings

Restaking can be significantly more capital efficient than PoS.

Bounds on extra stakes needed for secure restaking are derived.

Restaking savings can grow asymptotically as the square root of validators.

Abstract

We compare the total capital efficiency of secure restaking and Proof-of-Stake (PoS) protocols. First, we consider the sufficient condition for the restaking graph to be secure. The condition implies that it is always possible to transform such a restaking graph into separate secure PoS protocols. Next, we derive two main results: upper and lower bounds on the required extra stakes to add to the validators of the secure restaking graph to be able to transform it into secure PoS protocols. In particular, we show that the restaking savings compared to PoS protocols can be very large and can asymptotically grow as a square root of the number of validators. We also study a complementary question of aggregating secure PoS protocols into a secure restaking graph and provide matching lower and upper bounds on the PoS savings.