What is Restaking?
Restaking is a process that allows users to reuse their staked ETH or Liquid Staking Tokens (LSTs) to provide security for additional services on the network. This is facilitated by smart contracts, which enable the delegation of staked assets, thereby extending cryptoeconomic security beyond the primary staking application. Users can restake their tokens to secure multiple services simultaneously, reducing overall capital costs and increasing trust guarantees for individual services.
How Restaking Works
Restaking operates through smart contracts, enabling users to delegate their staked assets to secure multiple services. This reduces overall capital costs while enhancing security for each service. By restaking, users can optimize the use of their staked tokens, ensuring they contribute to the security of various applications on the network.
Restaking Potential for Node Operators
Node operators in the Wirex Pay network benefit from increased rewards and contribute significantly to the network's security and decentralization. Restaking offers a way to maximize the use of staked assets, ensuring node operators can secure multiple services efficiently.
Dual Staking: A New Era of Security
How Dual Staking Works: Dual staking uses two types of tokens to secure a Proof-of-Stake (PoS) network, leveraging both an external, stable token (like ETH or BTC) and the network’s native token. This enhances security and mitigates risks associated with token volatility, simplifying the bootstrapping process and improving economic security.
Economic Security: For Wirex Pay, dual staking can significantly enhance economic security by allowing WPAY to be staked alongside ETH and/or BTC. This ensures robust network security, even if WPAY value fluctuates, thanks to the stable backing of ETH/BTC.
Decentralization: Dual staking promotes decentralization by attracting a diverse group of stakers, broadening the validator base, and reducing centralization risks. This enhances the network’s resilience and integrity.
Mitigating the "Death Spiral": Dual staking mitigates the “death spiral” effect, where a decline in the native token’s value reduces network security, further depressing the token's value. With ETH/BTC as a secondary staked asset, Wirex Pay maintains a baseline level of security, safeguarding the network’s stability during native token volatility.
Innovative Dual Staking for Wirex Pay: Incorporating dual staking within Wirex Pay provides a balanced and secure framework for network growth. Leveraging WPAY and ETH/BTC enhances economic security, promotes decentralization, and mitigates risks associated with token volatility. This aligns with Wirex Pay’s vision of creating a secure, innovative, and community-driven payment network.
Node Operator Rewards
Wirex Pay dedicates 20% of its token supply to node operators, along with 40% of the transactional revenue attributed to Wirex Pay. There are two types of node operators in the Wirex Pay network:
Licensed Node Operator: This operator pays a one-off fee for the node license, which is issued as an NFT. To operate the node, the license holder must stake the NFT and WPAY tokens to receive rewards.
Unlicensed Node Operator: Anyone can operate an unlicensed node as long as the staking requirements are met. An unlicensed node needs to stake WPAY and stETH/stBTC (staked ETH or BTC token).
Both types of nodes receive equal rewards, but their staking requirements differ. This system ensures that even unlicensed operators can contribute to the network's security and decentralization.
Actively Validated Services (AVS)
An Actively Validated Service (AVS) is a system that requires its own distributed validation semantics for verification. These services can range from sidechains and data availability layers to oracle networks and threshold cryptography schemes. Each AVS operates with its own set of contracts that manage the state relevant to the service's functionality, such as operator management and stake security.
Application to Wirex Pay-Reconciliation of Onchain and Offchain Transactional Data
For Wirex Pay, an AVS is developed to handle the reconciliation of onchain and offchain transactional data. This AVS would ensure that transactions recorded on the blockchain (onchain) match the transactions processed by external systems (offchain), providing a robust mechanism for maintaining data integrity and consistency.
The AVS breaks down its operations into units called "Tasks." Each Task represents the reconciliation of a set of transactions between the onchain records and offchain data sources. Operators will validate these reconciliations based on predefined rules and thresholds.
The AVS specifies the type of trust it inherits, such as using geographically diverse operators to ensure decentralized trust. This setup ensures that the reconciliation process is both transparent and resistant to manipulation.
Clearly defined conditions under which operators will be penalized (slashed) for incorrect validations is the key. This could include scenarios where mismatches in reconciled data exceed a certain threshold or where delays in processing exceed acceptable limits.
By leveraging the AVS framework, Wirex Pay can create a secure, decentralized system for reconciling onchain and offchain transactional data. This ensures data consistency, enhances transparency, and maintains the integrity of financial records, thereby improving overall trust in the Wirex Pay platform.
Conclusion
Restaking and dual staking represent significant innovations for Wirex Pay, enhancing security, decentralization, and cost efficiency. These mechanisms ensure robust economic security and adaptability, positioning Wirex Pay as a leader in blockchain payment solutions. By leveraging these innovative staking models, Wirex Pay offers a secure and community-driven network, ready to support the future of decentralized payments. Join the Wirex Pay network and participate in our upcoming mainnet launch and node sale to be part of this exciting journey.
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