Restaked Staking Tokens
ETH Backed Tokens on Demand
Key Takeaways
- RSTs are a new feature made available to Restaking Cloud’s K2 protocol.
- In a few clicks, anybody can mint RST tokens that are backed by staked ETH.
- RSTs have a large variety of use cases including testing, node networks, and DeFi.
- Solo Stakers and node operators have additional yield opportunities beyond the ETH yield from Native Delegation.
Axiom of ETH-based decentralization
This blog is written with the assumption that the reader has a baseline understanding of Restaking Cloud’s K2 protocol.
K2 introduces the concept of the Restaked Staking Token (RST) that functions as a staking utility token for middleware, networks, or protocols. RSTs enable accelerated innovation by increasing the speed at which middleware can add or modify functionality for long-term, short-term, or testing purposes. This flexibility is crucial as Ethereum and web3 as a whole iterate quickly. It is impossible to measure what the next 12–48 months will look like and having ETH-backed tokens that match this fast-paced environment can spearhead a new type of innovation.
This allows developers and builders to “Pay as they go and pay as they grow”. This is an idea that stems from the fast iteration of web3 allowing for quick adaptation to the current trends.
If you need a referesher on Restaking Cloud or K2 and how it benefits solo stakers. See my talk from ETHStakers event in.
Defining RSTs
RST tokens are the logical next step for Restaking Cloud’s K2 protocol offerings — Tokens minted from restaked ETH positions. This comes off the back of K2’s Native Delegation feature that allows the entire Ethereum validator to be restaked without changing any business logic or withdrawal credentials.
RST Details
- An ERC20 token with a user selected ticker.
- Liquid and usable across all L2s, rollups, and L1s.
- RSTs are minted against restaked ETH yet can be canceled anytime.
- Every RST is uniquely mapped to a single SPB, but all ETH backing is fungible.
Note: Do not confuse RSTs with LSTs or LRTs.
RST Mechanism within K2
Setting up an SBP and opting for RST is an option, not a requirement. Users create their SBP, select the RST option, type in a ticker, and receive tokens that are verifiably backed by ETH validators. These tokens serve as a solid foundation for a network or protocol.
For a detailed overview of RSTs view the technical walkthrough with the dev team.
RST Use Cases
Networks and Oracles — RSTs can power node networks that require slashing and staking such as decentralized sequencers, indexers, oracles, L2s, or L1s.
Extend Reporters Beyond K2 — Those required to stake RSTs could be slashed from misbehavior. This could be a pass-down slashing from the primary SBP position.
Transactions — RSTs function as a transactional currency or a simple token backed by ETH rather than minted out of nothing.
Ecosystem Expansion — Builders can use RSTs to immediately bring TVL to their protocol or network.
Unlocking DeFi — DeFi yield protocol tokens and governance tokens can now be backed by ETH.
Community Tokens — Tokens could be distributed and used to represent membership within a community. They can even be governance tokens.
Local & Global Slashing — There can now be multiple levels of slashing. The global level to the underlying SBP borrowed ETH or the individual node operator via RSTs.
Testing on Ethereum Mainnet: RSTs allow developers to test tokenomics and protocols directly on Ethereum mainnet at the cost of testnet.
Liquid “Points” — Protocols looking to award users with a “Points” system can now do so with a liquid token that can be converted or burned at a later time.
Enhancing Native Delegation with RST
RSTs elevate the advantages to those using Native Delegation. This means additional rewards for solo stakers and node operators who wish to run additional software. Preferred node operators will emerge that will connect middleware, node networks, oracles, etc to node operators in Ethereum. Payments, penalties, and other interactions can be denominated in an ETH backed RST token rather than a native token.
With the ability to customize Reporters for specific RSTs. Node operators can now receive multiple payment sources from K2.
- Restaking yield in ETH
- Reporter yield in ETH
- RST yield as a preferred node operator
- RST yield by running customized Reporters
Solo Stakers and RSTs
One of the key attributes of Restaking Cloud’s K2 protocol is that Solo Stakers are always considered with each feature added. Solo Stakers are fully compatible with all RST operations. Tokens can be minted out of Solo Stakers’ Native Delegation and they can also become preferred node operators.
Restaking Cloud RST Economy
Looking Forward
As blockchain technology becomes more decentralized, modular, and absorbed into day-to-day life, there is a need for adaptive tokens. With the introduction of RSTs protocols and builders now have a method to maintain optionality in their tokenomics.
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DISCLAIMER: The text above is just a description of how Restaking Cloud works in theory. Any figures mentioned serve only as an illustration. Engaging in any blockchain activities with or without the necessary skills or experience can result in a loss of funds. This is a very experimental tool, so please treat it as such.
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