Restaking

A holder deposits a liquid staking token, or natively restakes a validator, into a restaking protocol and delegates to an operator. The operator opts into one or more services and runs their software; the services can slash delegated stake for defined faults. Rewards flow from the services to operators and delegators. Liquid restaking tokens wrap the whole position into a tradeable claim, which can then be used as collateral elsewhere.

For most of restaking’s history slashing existed on paper. Production slashing is now live on the largest protocol, which means restaked stake can be lost for operator faults for the first time. Newer designs isolate the stake allocated to each service, so a fault in one cannot burn stake committed to another; older delegations do not have that protection. Whether a given position is isolated is a question to answer before deposit, not after.

The delegator’s risk is the operator’s competence and the services’ code. Wesvel delegates only to operators with institutional infrastructure and a public record, and only to services whose slashing conditions are documented, whose contracts are audited and whose economic value to the operator is sufficient to justify the exposure. A service that pays little and can slash a lot is declined regardless of the headline yield.

Withdrawing restaked assets involves an unbonding period at the restaking layer and, for native positions, at the base network. Liquid restaking tokens can be sold instead, but they trade at a discount when many holders want to exit at once. Positions are sized so that the book never needs to sell a restaking token into a discount to meet an obligation.