In order to understand ClayStack’s ETH restaking mechanism, it is best to first start off by understanding the concept of “Ethereum staking” and restaking.
The minimum requirement to become an Ethereum validator is 32 ETH, a role that involves verifying transactions and maintaining network integrity. The validator be responsible for storing data, processing transactions, and adding new blocks to the blockchain. This will keep Ethereum secure for everyone in exchange for ETH staking rewards in the process.
Restaking enables the reuse of staked ETH and expands the role of validators, letting them participate in multiple ecosystems with the same asset, thereby improving capital efficiency for stakers.
Ethereum restaking operates through EigenLayer, a protocol built on top of Ethereum that utilizes smart contracts to enable ETH stakers to leverage their staked assets further by restaking on external protocols, enhancing staking yields.
This basically means that while your ETH remains staked, validators will continue confirming transactions, but your staking power will now expand to other protocols where you can earn additional rewards.
EigenLayer offers two methods for restaking:
- Native Restaking: A straightforward approach where you stake your ETH with EigenLayer by reassigning the withdrawal credentials of your validator to specific smart contracts called EigenPods.
- Liquid Restaking: A flexible approach where you stake your ETH and get a liquid staking token, like csETH or stETH. Liquid staking simplifies the process by removing the need to run an Ethereum validator node, lowering the entry barrier. After getting the liquid staking tokens, you can restake these assets through EigenLayer.
How ClayStack's ETH Restaking Mechanism Works
As we previously mentioned, the entry barrier to stake on Ethereum is quite high - you need to lock 32 ETH and become a validator. This makes staking opportunities beyond reach of many enthusiasts and investors.
With ClayStack, we strive to decentralize Ethereum by enabling users to participate in the staking process. The easiest way to do so will be to simply go on the ClayStack app and restake ETH in just one click. Users will be able to natively restake their ETH on EigenLayer through ClayStack and earn additional rewards and points distributed by EigenLayer, ClayStack and other AVSs.
Following this, the process unfolds with three things in mind:
- Eigenpod Creation: An Eigenpod, a dedicated smart contract managed by Eigenpod users a.k.a. ClayStack (among others) facilitating balance and withdrawal status monitoring. Multiple validators can be directed to a single Eigenpod, granting the staker (pod owner) ownership for staking and withdrawal operations.
- Validator Initialization: A staker can deploy one Eigenpod and use it as the withdrawal credential for multiple validators. After depositing ETH, they can "fully restake" validators by proving their withdrawal credentials are linked to the EigenPod. This activation awards ETH to the staker/pod owner with the option to delegate to an operator.
- Activation and Restaking: When a validator is successfully proven, its status switches to ACTIVE. The total restakable ETH from all newly proven validators is sent to the EigenPodManager, where it's added to the Pod Owner's shares.
Flow of ETH
Here's a breakdown of how your ETH moves within ClayStack:
- Deposit and Mint: You deposit ETH into ClayStack's deposit contract and receive csETH tokens, representing your stake.
- Accumulation: When the deposit contract gathers 32 ETH in its pool, the auto balancer activates to generate validator keys and necessary metadata for staking deposits.
- DVT clusters - The validator key generated earlier is split across DVT clusters to reduce single points of failure from the network and makes the whole validator set more robust.
- Validation: The Node Manager verifies the data for accuracy. Upon validation, the 32 ETH are transferred from ClayStack's deposit contract to the node manager.
- Staking: The Node Manager then uses the Eigenpod Manager's stake function, with the withdrawal credential set to ClayStack's address.
- Final Destination: Your funds are deposited into the ETH 2.0 Deposit Contract, poised to start earning points.
This seamless process bridges the gap between your investment and the Ethereum network, making staking straightforward, efficient, and cost-effective.
Restake your ETH with ClayStack
ClayStack simplifies all of the above with just one click restaking!
ClayStack offers a unique restaking mechanism that leverages DVT to make ETH staking rewards more accessible. This approach guarantees you an uncapped access to EigenLayer points without sacrificing liquidity.
By minting ClayStack’s liquid staking token, csETH, you will earn:
- Direct access to 100% of EigenLayer points, maximizing your benefits.
- CLAY points representing your share in the ClayStack airdrop, redeemable 1:1 for CLAY tokens at TGE.
- 100% staking yield from ETH, ensuring your investment grows optimally.
- Additional rewards from different Actively Validated Services (AVSs).
By choosing ClayStack, stakers not only contribute to the Ethereum network, but also position themselves to reap the full benefits of restaking rewards.