Blockchain & Cryptocurrency Glossary

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Restaking

1 min read
Pronunciation
[ree-stay-king]
Analogy
Restaking is like using the interest you earn from a certificate of deposit to purchase another certificate, growing your principal over time.
Definition
The act of taking earned staking rewards and re-locking them as new stake to increase the total bonded amount.
Key Points Intro
Restaking works by:
Key Points

Reward reinvestment: Bonds earned rewards back into the protocol.

Balance growth: Increases stake base for future rewards.

Manual or automated: Can be done by user or via smart contracts.

Enhances security: Larger stake strengthens network participation.

Example
An Ethereum validator collects 0.5 ETH in rewards per epoch and calls the deposit contract to restake that 0.5 ETH, raising their total stake from 32 ETH to 32.5 ETH.
Technical Deep Dive
Restaking involves sending a transaction to the staking smart contract specifying the amount of rewards to re-bond. The contract updates the validator’s stake record, recalculates voting power, and updates the reward distribution state. Gas optimization can batch restake and claim operations.
Security Warning
Frequent restaking increases exposure to slashing if misconfiguration occurs; ensure validator uptime and correct parameters.
Caveat
Requires transaction fees for each restake; small reward amounts may be uneconomical to restake frequently.
Related Terms
Compound Staking
Staking Rewards
Validator
Unbonding Period

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