- Restaking is a key tech for truly decentralized apps.
- Already on Ethereum, restaking is coming to Solana.
- This promises to enable user-friendly and decentralized apps.
While blockchain networks are approaching decentralization, most decentralized applications (dApps) are not. Instead of being controlled by their communities, dApps are typically controlled by their token holders, often a handful of venture funds and whales.
However, some apps are trying to change that, taking advantage of restaking to secure their network. Already popular on Ethereum, the largest and most decentralized network, restaking is now coming to Solana.
Why Restaking is a Big Deal for Solana
The latest technology on Solana could enable a proliferation of a large number of truly decentralized dApps. On Thursday, July 25, the Jito Foundation released the code for Solana’s restaking service. Initially popularized by EigenLayer on Ethereum, this technology enables staked assets to also provide security for multiple decentralized applications (dApps) and services.
One key feature of Jito’s code is its support for Actively Validated Services (AVSs). Instead of giving all control to token holders, these applications use Proof-of-Stake (PoS) or Proof-of-Work (PoW) consensus. The mechanism allows them to secure the app while maintaining decentralization, without giving all control to whales.
Restaking is key for these apps because the alternative, or setting independent consensus mechanisms, has major issues. Because they typically attract just a small number of validators, they are at a constant risk of exploits. With restaking, they can leverage the vast validator base from major networks like Ethereum, and now Solana.
Why Solana Restaking is Key for User-Friendly dApps
Solana’s popularity in the dApp space is growing rapidly, largely due to its scalable infrastructure and developer-friendly features. Fast speeds and low fees attract users, enabling use cases that were not possible on networks like Ethereum. The restaking feature will further boost Solana’s appeal.
Jito Foundation’s restaking protocol for Solana offers a high degree of customization. It enables protocols to use any type of asset for restaking, as well as multiple ways to punish bad validators. This increases its appeal to both validators and developers, while also boosting dApp security.
Thanks to these features, apps on Solana can not only be fast, but also decentralized and secure. Still, the feature is not yet implemented, and time will tell if it is robust enough to handle the vast Solana dApp ecosystem.
On the Flipside
- Using staked assets as collateral across multiple protocols has some risks. Because validators stake for multiple projects, they are exposed to increased risk of hacks. If just one protocol is breached, all the staked assets could be lost.
- Both staking and restaking come with regulatory risks, especially in the United States. In 2023, the Securities and Exchange Commission cracked down on staking offered on Kraken, issuing millions in fines.
Why This Matters
The introduction of restaking boosts Solana’s position in the blockchain space and also paves the way for a more decentralized and user-friendly ecosystem.
Read more about staking and how it works:
What is Staking? Crypto’s Most Common ‘Passive Income’ Strategy Explained
Read more about Russia’s shifting stance on crypto:
Why Russia’s Crypto Policy Could Be Taking a U-Turn
