原文作者:Steakhouse
原文来源:steakhouse
原文标题：Restaking and the price of trust
Compilation: LlamaC
"Recommended Message: This article re-examines some of the core issues of the current ETH ecosystem Restaking, AVS, and Liquid Restaking, and predictively provides an analogous risk and reward evaluation framework. enjoy！」
Trust is a necessary component of economic activity and human cooperation. In corporate interactions, trust is primarily built through reputation and legal enforcement. A decentralized trust network is a new type of coordination mechanism that allows individuals to transact remotely without the need to trust an intermediary. Ethereum and the proof-of-stake system have created a concept of collateralized cryptoeconomic security, where the native token is used as collateral by network providers to provide decentralized trust.
Restaking expands Ethereum's crypto-economic security by creating a "decentralized trust marketplace." This is achieved by bringing together Ethereum's re-stakers and validators (providers of decentralized trust) with seekers of decentralized trust AVS (Active Verification Service). Note that Ethereum itself is, in principle, an AVS. Other AVSs can lead to the creation of new decentralized trust networks that provide specific services through restaking.
Providers who repledge ETH must conduct a risk/reward assessment of the network for which they provide secure collateral. The expected total return is an important part of the security of the crypto economy, as the higher degree of return makes it more attractive for decentralized trusted providers to participate in the network.
In this article, we explore the restaking landscape in order to price the restaking risk in these AVS networks and derive a simplified framework for valuation. Our rough framework takes into account the "cost of trust" used in capital market pricing risk. Broken down into:
Trust Reward = Price Reward + Work Reward + Repledge Reward - Default Loss
Re-stakers should evaluate the available opportunities in a systematic manner and determine if the rewards are equal to the risks. The market has very high expectations for restaking returns, which are priced in through multiple tiers of points. Ultimately, we believe the market will have to confront the stabilizing realities of AVS's monolithic economics and the affordability of its security budget.
Restaking 101
What is AVS?
Active Authentication Service (AVS) is a business that requires a high level of trust to provide utility and is trusted through cryptographic security mechanisms rather than traditional, centralized security models that rely on trusted intermediaries.
In the broadest sense, decentralized applications (dapps), smart contracts, and the blockchain itself are all securely delivered through the cryptoeconomy. Many services rely on the default security model of some of the largest networks, such as Ethereum, that require services to conform to that network's standards. However, some services may choose to create their own security models for a variety of reasons:
• Fine-grained customization of specific rules, features, pricing, or performance
• Full sovereignty over governance and operational decisions
• Innovative or novel mechanisms at the consensus or other protocol layers
•neutrality
• Trust assumptions and specific security requirements
Unfortunately, decentralized networks with native crypto-economic security can be expensive and complex to build from scratch. In fact, the relative lack of success of many Layer 1 blockchains demonstrates the high cost and coordination complexity required to bootstrap a decentralized crypto-economic security network with many distributed validators. In addition, many Layer 1 blockchains have highly volatile token prices, often leading to instability in the amount of crypto-economic security present in the network and driving up the long-term cost of capital for these projects.
Source: stakerewards.com as of 24 March 2024
Although the inflation rate is not a good indicator of decentralization, it can be seen as a useful signal that the network seeks to balance with the number of validators it is trying to incentivize to join the network. In new, bootstrap phase networks, such as Dymension, inflation is very high as compensation for attracting new stakers. If the long-term "revenue growth" of the network can overcome the effects of dilution, paying new validators to join the network is a sustainable long-term expense.
What is Restaking?
Restaking is the re-staking of ETH LSD assets for new active validation services (AVS) that impose new slashing conditions on capital. AVS can choose to "lease" their security from Ethereum stakers instead of bootstrapping a whole new crypto-economic security network from scratch with their native token. Restaking allows ETH stakers to gain enhancements from a capital efficiency perspective, while providing potentially more stable security for AVS, who are no longer subject to fluctuations in the price of the native token. Ethereum's vibrant economy and ecosystem activity make ETH a superior, blue-chip collateralized asset, similar to the concept of "hard currency."
There are advantages for these services to choose to lease their security in "hard currency" rather than building an entirely new cryptographic security system from scratch.
In a PoS security system, stakers accept opportunity costs and price the risk for the tokens they must commit in order to validate the network. The network must provide a sufficiently high staking return in order to:
1) Attract depositors;
2) Offset the fixed cost of the validator's services. The more trust (staking) required to secure a service, the more expensive it is to meet the needs of stakers. In addition, the more value AVS products and services carry, the more security trust is required. In AVS's monolithic economics, the cost of security is an expense.
The economics of AVS require a significant amount of capital to provide this level of security, which ultimately means that a significant amount of utility should be provided from the service and a corresponding cash flow should be earned. AVS, which otherwise can't capture enough value, will be forced to find creative ways to fill this expense, for example by increasing the inflation of the native token, or else will end up with a business shutdown.
The premise of re-staking is that leased capital is cheaper than buying or locally structuring a pledge. When centralized, the size of security and the cost of security can really reduce expenses. Like many businesses with heavy physical inventory, leasing is often the right decision for early-stage or immature businesses.
From a balance sheet perspective, we move from linear, single-leverage of user equity to a multi-tiered, leveraged safety model with different security needs and amortization of capital. This comes at the cost of increasing the leverage risk on the underlying collateral.
From AVS's point of view, leasing amortization security with ETH collateral is a financial engineering that looks a bit like debt versus equity. We assume that the need for security will be relatively inelastic because it is an extrinsic variable.
The more assets AVS provides security, the higher the demand for collateral will be, increasing the cost of restaking, but there is no pressure to increase security for the same amount of assets – although there is likely to be a local panic and the cost of recollateral will become more expensive if the security collateral is withdrawn.
The cost of security will be the balance of supply and demand for re-staking fees. It is assumed that if AVS is unable to meet its payment obligations, the re-staker will have no incentive to provide safe collateral and will withdraw their stake, making the new security more expensive. If there is more supply of re-staking collateral, the cost of security should be reduced all else being equal, both for AVS and for re-stakers.
What are the different types of AVS?
At the time of writing, this is a bit of an illusion, as there are no AVSs live yet, although some are expected to launch on mainnet soon. As a result, the classification of AVS is speculative. However, we can imagine a scenario of virtual services and try to categorize them in a useful way to identify value and risk drivers. From an economic perspective, a relevant taxonomy might look at how AVS creates value and incentivizes participation.
The following is a non-exhaustive list of AVS at the moment, as new types of services may emerge in the future that are less dependent or relevant to the underlying Ethereum base layer.
What is the source of AVS returns?
We anticipate that re-staking fees and their relationship to the AVS monolithic economy will be the only source of truth as to whether AVS can be secured and generate attractive returns for re-stakers through the continued rental of re-staked ETH. The rewards received by re-stakers are also stacked on the axis of small to large risk and small to large reward variability.
The easiest way to assess the sustainability of AVS's staking security model is to draw an analogy from the Debt Service Coverage Ratio (DSCR) in traditional commerce:
DSCR = Earnings / Total Debt
We can slightly adjust it to accommodate restaking and produce a Re-Staking Operational Acceptable Ratio (ROAR):
ROAR = AVS Cash Proceeds / Total Cost of Security Rent-seeking
Where AVS cash proceeds can be broken down into:
AVS Cash Proceeds = Profitability x Efficiency x TVL = AVS Earnings / Sales x Sales / Assets x Assets
Without any history of AVS operations, we now can't really tell what level of ROAR is sufficient. Simply put, AVS must be able to structurally afford the security expenses it requires, or it needs to rethink its security needs and find other solutions. If an AVS is too small to afford to pay ETH collateral in hard currency to support L1 validation, one way to bridge the gap is to bridge the gap by issuing equity-like native tokens until they can reach a scale that slows down dilution. The percentage of fees paid in non-volatile tokens or through native token dilution will determine whether the re-staker should plan the AVS selection from the perspective of a creditor or an equity investor.
However, this introduces a concept similar to the sustainability of earnings faced by the new Layer 1 blockchain, which must increase its issuance to pay for the new security. The danger of the reflexivity of native token issuance is that few cryptoeconomic protocols have found a sustainable balance between issued and issued tokens. Ethereum is one of the few major ones at the network level.
AVS's preference to issue its own tokens may be at least partly due to possible market inefficiencies in the crypto market, which reduces the effective cost of capital relative to native tokens from other sources of capital. While equity issuance will be a hotly debated issue in traditional commerce and is often the most expensive source of funding for businesses, crypto appears to benefit from an over-inflated price-to-earnings ratio, which reduces the cost of capital for new tokens overall.
In order to assess whether such an issuance is sustainable in the long term, the re-staker must determine whether the price return of the native token (yield growth x multiple growth x supply change) will overcome the initial inflationary period. Leasing a secure boot boot is an operational lever that can help AVS scale faster than they would have to bootstrap their own L1 network themselves. The distribution of native tokens also has additional market benefits, potentially binding participants in the AVS ecosystem together in the long term.
However, there is still a bit of déjà vu here, as the main purpose of re-staking is to provide lower-cost security through amortized collateral and avoid the inflationary cost of bootstrapping a brand new L1 from scratch for crypto-economic security.
How do you measure the cost of trust?
In traditional finance, the total return of an equity investor is the sum of price returns and dividend earnings. Namely:
Total Return = Price Return + Dividend Yield
Price returns can be further broken down into 3 value drivers:
Price return = earnings growth x yield multiple growth x token supply change
Dividend income is an additional medium-term cash flow granted to capital providers. All capital providers usually receive the same dividend yield.
In a decentralized trust network like Ethereum, there is an interim cash flow that is awarded to the job provider. The work in the context of Ethereum is to participate in validating transactions by providing 32 ETH as collateral for the security of the crypto-economy. Unlike dividend earnings, work earnings depend on whether the ETH holder stakes or not.
Total return = ETH price return + work earnings
This "work reward" is essentially negative for non-stakers because they are diluted by the new issuance of ETH that is rewarded to stakers. To some extent, stakers can be treated as preferred shareholders who are entitled to dividend payments, while non-stakers can be treated as ordinary shareholders who suffer dilution. There is a hypothetical example in the appendix that illustrates the impact of whether or not ETH holders stake on their total returns. At the same time, the chart below shows the breakdown of ETH's price returns, including changes in gas fees in USD, network multiples, and supply growth. Multiplying these three components over a specific period equals the price return of ETH.
来源: Dune. https://tinyurl.com/2yzvxk4u
The repledge economy adds a new dimension to the capital structure. Leasing crypto-economically secure AVS from ETH restakers will have quasi-debt/equity characteristics. In the context of a theoretical AVS balance sheet, the hybrid nature of re-stakers comes from the fact that re-staking rewards will sometimes be paid out in ETH, sometimes in AVS's native token, or a mix of both. If a re-staker receives yield in the form of ETH, they will be more of a "debt investor" in AVS, and the re-staker does not explicitly benefit from the upside potential of the AVS economy. If a re-staker earns yield on AVS's native token, they will be more like an "equity investor" in AVS. In addition, depending on the number of ETH repledges, there will be the concept of "priority" and the perceived security of repledged ETH. It depends on how many times the ETH has been repledged. The probability of "default" by restaking ETH can increase exponentially with the number of times the same ETH is repledged to secure another AVS. In the most favorable scenario, "attributable security" that is exclusively retained by AVS and paid by ETH restaking proceeds can be considered "senior debt". As ETH is repledged more in various AVS, ETH will be considered "primary debt".
If an ETH re-staker in AVS is rewarded in ETH, their total return is simply re-staking yield. In other words, re-stakers are not directly exposed to the risk of AVS's economic upside potential. If ETH restakers are rewarded in AVS's native token, their total return will include the price return component of AVS tokens. As a result, re-stakers care about the upside potential of the AVS economy to the extent of their holdings of issuance.
Total Return = ETH Price Return + ETH Staking Yield + Restaking Reward
thereinto
Re-staking Yield = Re-Staking Yield (Non-Volatility Component % + AVS Token % x AVS Token Price Return)
Trust cost of a single AVS: The above tells us that the re-stakers need a return, so the "trust cost" of the AVS network depends on three main factors:
• The number of times the ETH supplied to AVS has been repledged (i.e., the less ETH is repledged = the lower the cost of trust)
• The currency in which the re-staker receives the re-staking reward (i.e., the native token = higher trust cost)
• The price return of the AVS token, which will reflect the business fundamentals in the long run
Along with this, re-stakers who receive re-staking rewards in AVS's native token will need to carefully consider the long-term sustainability of the network. The chart above shows the breakdown of Ethereum's price returns. We can imagine that a similar exercise could be conducted on a forward-looking basis for the AVS they will restake, based on the re-staker's perception of the viability of the AVS business.
Cost of trust across multiple AVS: The role of the AVS operator, or LRT, is to aggregate the total value locked (TVL) from the re-staker in order to re-stake across multiple different AVSs in order to increase the return on re-staking ETH. We are unable to quantify the correlation between the different AVSs and the potential for increased reduction losses. Nonetheless, we acknowledge that the expected loss from a single slash event will increase as ETH is re-staked multiple times in various AVS.
Trust Return Formula: Given the above, we have come up with a simple intuition about "trust returns" in the restaking economy. Namely:
Trust return = ETH price return + ETH staking reward + re-staking reward - default loss
What should be the restaking return for AVS?
At the moment, there is no historical record, and there is no concept of how much re-staking AVS can afford as a security budget as ETH collateral. We propose a simplified framework for assessing what a hypothetical AVS might be affordable if viewed as a business, taking into account constraints such as returns that its token holders may claim.
In short, the degree of security that AVS promises to provide to its business should be proportional to the value or amount of activity performed on AVS. Insufficient commitment could disrupt AVS or disrupt its operations. Committing too much runs the risk of incurring unaffordable costs that AVS users don't get for the additional marginal benefits.
Leveraged work income (re-pledge)
This is a schematic, simplified representation of what the AVS balance sheet needs to look like and the minimum level that AVS cash yields need to reach on an annual basis to achieve the different rates of return (i.e., restaking fees or yields) required by restakers. We also show the corresponding ROAR ratios to signal sustainability and compare them to cases where AVS doesn't have enough security to run its services and where too much security can't afford it.
To make clear what these reverse engineering revenue thresholds actually expect: To date, only a handful of projects on Ethereum have generated more than $100 million in revenue per year, including Ethereum itself.
Today, EigenLayer and higher-leverage derivatives (such as Liquid Restake Protocols), use the concept of points to attract initial capital to commit their collateral to repledge. This is a smart move because it avoids early commitment token dilution and allows these protocols to change the criteria for assessing the value of points in actual dilution or hard currency payments. With sufficient bargaining power through a higher committed capital, they can decide not to give any monetary value at all, achieving a cost of capital on a 0 basis.
Prior to this, the market expectation for credits was priced in the range of about 40%. Using our earlier framework, this suggests that in order for ROAR to be safely greater than 1, AVS should be able to generate a return on equity equivalent to at least 40% of its native token. For low-margin crypto services, especially if the asset efficiency is less than 100%, i.e., underutilized TVL to set aside a reserve for losses, the only way forward for service operators is through a more leveraged balance sheet.
Who are AVS's customers?
Many AVSs can be thought of as providing value-added services to other infrastructure providers such as roll-ups. In this sense, AVS can be seen as a B2B (business-to-business) service rather than a B2C (business-to-consumer) service.
The market potential of AVS serving Rollups today will be limited by Rollups revenue. The 12.8k ETH gas fees generated by the top Ethereum L2 in February meant that the Rollups revenue was running at 153.6k ETH. Let's assume that all Rollups revenue can be redistributed to the AVS service. Currently, Eigenlayer has 3.535M re-staking ETH. This means that in the most generous scenario where all L2 revenue can be redirected to AVS, the re-staker will receive 153.6k/3.535m = 4.3% annualized yield. We note that this annualized return does not take into account any consideration of the risk reduction and "default loss", which we will explain in the next section.
来源:dune. (@निफटीटेबल), Hatps://tinyural.com/2DBS87DU
If we limit the market opportunity to sequencer margins (i.e., Rollups revenue minus Ethereum call data costs), then the number will be narrowed down to 54k/3.535m = 1.5% annualized return.
来源:dune. (@निफटीटेबल), Hatps://tinyural.com/2DBS87DU
In fact, our suspicion is that most Rollups will do their best to protect their serializer margins and choose services that offer cost savings (e.g., EigenDA provides cheaper data availability than Ethereum) or address real technology gaps (e.g., interoperability). As a result, in the early stages of AVS's launch, it may be necessary to pay the majority of the staking rewards for AVS's native token issuance. As we mentioned in the trust cost formula we came up with above, issuing in the native token instead of paying in ETH will increase the trust cost of AVS.
The market dynamics can change interestingly, as the annualized percentage of restaking of +40% of market expectations (as reflected in points) counters the realities of AVS monomer economics and scale. This expectation is more challenging when compared to the lower share of profit that L2 may provide re-staking yield.
来源:dune. (@स्टीकहाउस), Hatpas://tinyural.com/233Kr6J
来源:dune. (@स्टीकहाउस), Hatpas://tinyural.com/233Kr6J
Assuming all Layer 2 profits go to the re-staker to pay for shared security – which is an impossible cap estimate at best – we are left with about 1.5% ± 0.5% of the re-staking yield. If that profit share reaches a more reasonable but still aggressive level where 20% of all Layer 2 profits go to the restaker, then our yield is around 10%. The repledge yield is 0.75% ±0.25%. This is at least related to an estimate from an emerging liquidity repledge token (Jason Vranek from Puffer Finance), which recently estimated that a repledge yield of around 0.5% would be "good".
Default Losses: Cuts and Other Risks
The risk of re-staking must be carefully considered, as user collateral is effectively re-staked to support multiple major validation services. This means that there is a chance that the collateral of the re-staker will be cut under entirely new conditions, depending on a number of special factors beyond the crypto-economic verification activity.
EigenLayer's risk document very clearly and convincingly confirms that it will not re-stake the staked tokens. However, the concept of leverage does exist, as the token is reused multiple times and may be more akin to leverage in the sense of a bank multiplier.
The risk of restaking ETH starts with the slashing or operational risk of staking ETH. In the earnings management study conducted for Lido DAO, we found that the risk of a large slash (a single operator being offline for more than 7 days) would have an impact of about 0.01% on all stETH. Operational risks are more disruptive in tail risk events, such as Prysm errors and large withdrawal queues (0.315%).
These risks are stacked with re-staking risks. When re-stakers commit their ETH to secure AVS, ETH is "at risk" in a manner similar to Ethereum staking. Node operators entrusted with validation activities must operate correctly to avoid user collateral being cut. There is no final version of the slash conditions that will affect re-stakers, so we can only guess how likely this is. The priority is to keep the operation simple and easy to do and not change the node requirements to prevent high corruption costs.
We don't think these risks are entirely impossible. Underwriting an AVS will most likely prove to be very similar to the creditworthiness of underwriting a regular commercial loan, and the capital that is now at risk is somehow affected by operational and commercial risk, and not just pure consensus algorithmic math. It is also worth mentioning that there is also a moral hazard effect, as AVSs that cannot afford local L1 to safeguard their activities will be incentivized to seek lease capital at a lower cost, similar to the moral hazard underwritten by insurance.
We can frame the impact of losses, including reductions, qualitatively as default losses, similar to traditional financial analogies. Default losses capture the additional risk of ETH holders opting in:
• For non-stakers, the default loss rate is 0
• For local stakers, the default loss rate is determined by the cutdown probability * cutdown loss rate and additional special risks, depending on the staking method chosen
• For restakers, the default loss includes the previous content and adds the portfolio default loss for the restaking service: some text
○ Special losses from cuts or other operational errors
○ A related loss between a cut or loss event on one AVS and another
○ Losses associated between Ethereum staking and AVS
That is, we can only guess what the source of the loss of re-staking is.
This means that default losses actually increase as the number of times ETH collateral is repledged. The more opportunities there are for correlation to occur, the more likely it is that a loss of earnings event will occur.
That said, there are various mitigation measures to mitigate potential loss outcomes that may result from cuts or operational errors. The maximum loss for stakers on Ethereum is essentially limited to 50% of each validator's collateral. Similarly, we can expect that there will be a cap on the correlation between AVS and between AVS activity and Ethereum staking. We expect that the final optimization curve chosen by AVS will yield a diminishing return due to the default loss rate, so that there may be an optimal maximum amount of AVS allocation.
The curve below assumes that every AVS in the set is the same, and that the average restaking fee is around 5%, which is the maximum estimated upper limit that Rollups revenue may generate.
Liquidity re-staking protocol
The Liquidity Restaking Protocol (LRT) introduces a new dimension of aggregation and liquidity. When considering the balance sheet, unlike Ethereum-staked liquid staking tokens (LSTs), LRT's asset allocation strategy involves a more diverse range of risks and rewards. Although the management of node operators is a key function of LST, they tend to be broadly aligned in similar dimensions and compete fiercely on price and performance.
The evolution of LRT as an LST may find that the end product does not match the user's expectations of the underlying asset. When mapped to a familiar fiat financial system, the LST acts as a monetary policy transmission tool, similar to a core bank deposit or government debt instrument. Where stETH is the underlying asset, LRT is money management, i.e., more akin to structured products or bond funds.
The purported benefits of LRT lie in AVS management, which maximizes the return of restaking ETH by generating AVS re-staking fees while minimizing default losses. This improvement in decision-making space must be operated in a limited profit margin to be shared among more participants.
If the returns are insufficient, meaningful differentiation cannot be reflected, and the LRT may be forced to take on more risk by allocating to an AVS with higher balance sheet leverage, or simply fail gracefully or compete with the LST by default.
Addendum: Work Benefits
We use hypothetical numbers and the familiar equity analogy to illustrate Ethereum's concept of "earnings from work." Ethereum's "Return on Capital Policy" for its token holders is set as follows:
The staker is a preferred shareholder and is entitled to cash dividends (i.e., user tips and MEV) + stock dividends (i.e., new token issuance). These two make up the total validator reward.
Non-stakers are ordinary shareholders.
All shareholders can benefit from share buybacks (i.e., user gas burning).
As shown below, stakers receive higher yields at the expense of non-stakers. Specifically:
Stakers earn 3.33% on their work, consisting of 0.29% cash dividend yield and 3.03% "stock dividend" yield.
The work yield for non-stakers is -0.57%, which is due to the dilution of "stock dividends" (i.e., new token offerings) issued to stakers.
In conclusion, cryptocurrencies offer a uniform price return for all token holders, but offer different levels of "work gains" depending on the type of token holder. This means that people who provide jobs may have a different view of the "fair value" of the token than those who don't.