Restaking Mechanism
Last updated
Last updated
Pell Network offers various pathways for revenue stacking, allowing stakers to earn additional income by acquiring new Decentralized Validated Service (DVS). Broadly speaking, these can be linked to three different layers of the blockchain: the core protocol, DVS, BTCFi or DeFi.
Liquidity staking can be seen as stacking revenues by first entering the core protocol and then moving into the BTCFi/DeFi ecosystem. Superfluid staking is perceived as first entering the core protocol layer, then moving into the BTCFi/DeFi ecosystem.
In Pell Network, revenue stacking can be visualized in several forms:
LSD Restaking: Stakers can restake their Liquid Staked Derivatives (LSD) by transferring them to a Pell Restaking Layer smart contract. This represents a revenue stack route from BTCFi/DeFi to Pell Network.
BTC LP Restaking: Stakers provide liquidity by staking a pair of LP tokens that include BTC. This is another example of a BTCFi/DeFi to Pell Network revenue stack.
LSD LP Restaking: Stakers can stake LP tokens that include a liquidity-staked BTC token. This follows a more complex revenue stack route from BTC to BTCFi/DeFi, and then to Pell Network.
Each of these pathways carries different types of risks. Pell Network adheres to an opt-in governance model, where the management of these risks is delegated to module developers. These developers have the flexibility to choose which tokens to accept as stakes for their DVSs, and they can also decide how to prioritize rewards for different types of tokens. For instance, a module that prioritizes decentralization might only accept native BTC for restaking.
This structure allows stakers to tailor their involvement according to their risk preferences and desired rewards, while Pell Network's flexible governance ensures that each DVS module can adapt to the specific needs and priorities of its developers and users.
Pell Network contracts implement a 7-day withdrawal delay for LSD tokens, serving as a crucial security measure in the event of vulnerability disclosures or detection of abnormal activities by monitoring systems.
