Restaking Cloud’s K2 Protocol — Introduction
Key Takeaways
- Restaking Cloud’s first protocol is called K2 and treats Ethereum validators as “Safe Assets.”
- ETH Restakers are passive yield earners who are paid in ETH (there could be additional ERC20s in the future).
- Native Delegation allows any validator to participate in staking without changing withdrawal credentials or changing anything about business operations.
- Reporters are ultra-lightweight zk gadgets that can be run by anybody to collect ETH by working for the middleware. They are middleware themselves.
- Slashing and liveness logic is only the beginning of what is possible with K2 and Restaking Cloud.
- If you have any ideas to build, thoughts, or comments fill out this form or contact me directly.
Ethereum Alignment & Safe Assets
Restaking Cloud’s first protocol K2 efforts to follow Ethereum values: security, sustainability, scalability, and decentralization. At its core, it revolves around the principle of treating Ethereum’s validators as “Safe Assets”. Validators are inherently low-risk, yield returns in their native currency (ETH), and come with a low underwriting risk (can build additional products out of them). This status as a safe asset is crucial, as it defines many of the attributes that allow Ethereum to remain the bedrock of all web3.
ETH at Stake
Restaking Cloud’s K2 mirrors the concept of “ETH at Stake”, allowing all applications and protocols to access consensus layer assets without the direct ability to affect the validator. This is simliar to how the consesnus layer works. DeFi protocols receive the security of ETH validators without direct ability to slash. Restaking Cloud allows segmenting ETH at stake to make it available to individual protocols, applications, and infrastructures. These collectively referred to as “middleware” or “Stake Borrowers” can now benefit from the security provided by staked ETH and decentralized trust networks, without putting the safe assets at risk.
ETH Restakers
Everyone can restake ETH. All 850k+ Ethereum validators are compatible along with LSTs (currently kETH, dETH, stETH, rETH). Their role is passive and they have protected deposits. This means that yields may vary, but their deposits cannot be slashed. Restakers are paid for allowing others to access their ETH at stake permissionlessly. The movement of ETH is never restricted and stakers can come and go whenever they want. All payments made to restakers are in ETH.
Native Delegation
Native Delegation is a pivotal feature that aligns with the ethos of solo staking and not overloading consensus. All validators are accepted into restaking via Native Delegation without a withdrawal credential. This means solo stakers, DVT, and any node operator who holds the signing key can participate. They share all of the same attributes as those with LSTs including protected deposits. Native Delegation is thus a critical innovation when considering the widespread applications of restaking. The feature allows K2 to meet the market where they are rather than asking them to adjust their business logic or ownership of validators.
Middleware
In Restaking Cloud’s design, middleware entities outline any type of logic they would like monitored or verified and backed by ETH at stake. They operate on a model that is a transparent pay-as-you-go access to programmable trust.
Steps for Middleware
- Determine slashing logic.
- Borrow ETH at stake via the dApp.
- Reporters execute logic.
- Middleware can terminate or modify services at any time.
As middleware matures alongside the evolution of the K2 protocol, it will become as ubiquitous and straightforward as accessing an API. These entities, integral to the network’s functionality, make all their payments in ETH to both Reporters and ETH stakers.
Reporters: Everyone can earn ETH
Reporters play an essential role as enforcers of middleware’s logic and monitor restakers’ payouts. This role is designed to be as accessible as possible, requiring minimal hardware and offering compensation in ETH without providing any upfront capital. This inclusivity ensures a wide and decentralized network of participants, upholding the security and reliability of the entire Restaking platform. Although the baseline reporting can yield ETH, there will be further opportunities for Reporters to customize value offerings to middleware.
Relationship Between Participants
The entire ecosystem is designed without intermediaries (no oracles or outside dependencies). This allows for each participant to find alignment and value at their particular part of the stack. By each earning ETH or receiving a service, a symbiotic relationship forms. A middleware could also become a Native Delegator and Reporter to hedge costs. A Native Delegator could easily become a Reporter if they are already a staker running hardware. The entire ecosystem is inviting for others to begin building and defining their restaking participation.
Embracing Ecosystem Design Partners
Our ecosystem design partners are the vanguard of our collaborative efforts. They bring to the table their expertise and practical insights, which are invaluable to the iterative development of the Restaking Cloud. Their involvement is instrumental in not only testing but also in shaping the direction of the platform. They are bringing forward some of the most innovative ideas in web3 that they want to build on K2. If you’d like to meet the ecosystem design partners, check out restaking.cloud. Chances are it’s out of date but is updated periodically (as of now quite a few need to be added). If you have an idea for something you want to build with Restaking Cloud’s K2, please fill out this form or find a way to contact me directly.
Looking Forward
Restaking Cloud is more than an infrastructural advancement; it represents a shift towards a blockchain reality that is secure, efficient, and, importantly, user-oriented. It channels the spirit of Ethereum’s community-driven ethos while fostering an environment where safety and inclusivity are paramount. As the foundation continues to be built, Restaking Cloud stands as a beacon for what the future of blockchain can look like — modular, interconnected, and remarkably resilient. The Restaking Cloud team will continue to develop and add features where they are most desired by the community. This could include tools for creating payment channels for preferred restakers or preferred reporters and adding more templates and other toolkits.
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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.
Before participating please read the disclaimer here.
