Restaking Recap

Restaking is a blockchain-native method that allows end-users to simultaneously stake the same tokens on the main blockchain and other protocols built on top, securing multiple networks at once. Applications such as bridges, oracles, and interoperability infrastructure benefit from restaking by renting security from the underlying network. This benefits these applications because they no longer have to spend time recruiting a decentralized set of validators and stakers, and can instead focus entirely on their product development. The payments from these applications to the underlying network is returned to the stakers as restaking rewards. In other words, stakers are being rewarded for sharing the security of the underlying network.

However, restaking also comes with increased risks, particularly in the form of slashing. Slashing is a mechanism used in PoS blockchains to penalize validators who fail to act in the best interest of the network. In the context of restaking, the risk of slashing is increased due to the additional commitments made by the staker. For a more detailed introduction on restaking and the need for shared security, please see InfStones’ recent article on Symbiotic here.

What Is Jito Restaking?

Thus far the restaking narrative has primarily emerged on Ethereum. Jito, a Solana-native validator node client software and liquid staking platform with over $2.37B USD in TVL, has introduced the concept of restaking to Solana.

At its core, Jito's restaking platform is a multi-asset network capable of leveraging staked-base assets such as JitoSOL or any other Solana Program Library (SPL) token. As a result, projects building on Jito can turn these SPL tokens into a staked, or restaked liquid asset.

Jito’s restaking protocol offers a highly adaptable solution for networks to establish consensus and secure economic integrity across various on-chain and off-chain operations. And unlike EigenLayer & Symbiotic, Jito allows for the creation of native Vault Receipt Tokens (VRTs) within the restaking protocol itself. Jito Restaking consists of two key components:

The Vault Program:

• The Vault Program is the primary point of access for end users, handling all minting, burning, and management of Liquid Restaking Tokens (LRTs).
• The term VRT is essentially interchangeable with Liquid Restaking Tokens (LRTs). It allows users to stake any SPL token to receive VRTs, which can then be used in DeFi while the underlying assets remain securely staked.
• Through the Vault Program, users can easily choose how to delegate their tokens and manage rewards while benefiting from a broader range of assets and security options.
• Behind the scenes, the Vault Program enables flexible delegation and coordination among Node Consensus Networks (NCNs) and operators, empowering secure and efficient interactions with other participants in the ecosystem.

The Restaking Program:

• The Restaking Program primarily supports NCNs, operators, and Jito by facilitating relationships and securely managing the flow of assets and delegations across the network.
• It coordinates key functions, such as setting up partnerships between NCNs and operators, while enforcing customizable slashing conditions and security protocols that protect the entire ecosystem.
• By providing a structured and secure framework for collaboration, the Restaking Program ensures that operators, vaults, and NCNs can manage risks and rewards more effectively, ultimately supporting the stable growth of DeFi on Solana.
• Jito’s restaking protocol opened for initial deposits on October 30th and their launch was extremely successful, with the $25M USD cap being filled in just a few hours!

Jito’s restaking protocol opened for initial deposits on October 30th and their launch was extremely successful, with the $25M USD cap being filled in just a few hours!

Source: Jito

Vault Receipt Tokens (VRTs)

Vault Receipt Tokens (VRTs) represent a user’s restaking position with added layers of flexibility and risk management. Unlike traditional staking, where users are often locked into supporting a single network or asset, VRTs empower users to select the specific Node Consensus Networks (NCNs) they wish to support.

This means that stakers can tailor their exposure based on the risk profiles of different NCNs, allowing for a more sophisticated and personalized risk management strategy. By choosing which NCNs to support, users can align their staking activities with their individual investment goals and risk tolerances.

Source: Jito

Another significant benefit of VRTs within the Jito Restaking platform is the ability to stake a wide variety of Solana Program Library (SPL) tokens, not just native tokens like JitoSOL. This broader token support enables users to diversify their VRT holdings across multiple assets, enhancing their ability to create balanced risk-reward profiles.

Most staking protocols limit users to staking only the network’s native token or its liquid derivatives, restricting diversification opportunities. Jito Restaking breaks this limitation by allowing any SPL token to be staked for VRTs. This flexibility opens doors for users to participate in a wider range of assets within the Solana ecosystem, optimize their returns, and engage with multiple projects simultaneously, all while maintaining liquidity and control over their staking positions.

Node Consensus Networks (NCNs)

Node Consensus Networks (NCNs) coordinate collections of nodes to validate transactions and other critical information in a decentralized network. NCNs are the equivalent of Actively Validated Services in the EigenLayer ecosystem and Networks in the Symbiotic ecosystem.

Setting up an NCN is typically costly and time-intensive, especially when aiming for a highly decentralized and secure system. However, Jito’s Restaking Program enables projects to launch NCNs with minimal upfront costs and operational complexities.

Jito’s Restaking Program supports diverse NCN types, including blockchains, cross-chain bridges, oracle networks, and other systems needing decentralized consensus.

Jito’s highly customizable framework lets developers use any SPL token as a security mechanism, creating an adaptable staking marketplace where NCNs, operators, and vaults can mutually engage.

The restaking process begins with operators like InfStones signaling their intent to support NCN software, allowing NCNs to opt in and establish a secure, collaborative ecosystem. Some examples of NCNs building on Jito include:

Twilight - Twilight is a decentralized bandwidth infrastructure that lets anyone contribute their hardware and monetize unused bandwidth. Twilight's network of nodes will process the user's bandwidth, anonymizing and securing it, while guaranteeing a stable connection.

Leaf Protocol - Leaf is pioneering the first L2 that eliminates MEV, achieves unparalleled throughput with parallel execution, and fortifies security through restaking a basket of assets.

How Jito Restaking Differs from Other Platforms like Eigenlayer and Symbiotic

Aside from being built on Solana, Jito differs from Symbiotic and EigenLayer in a few key ways:

1. Tokenized Liquidity through VRTs: Jito’s VRTs offer unmatched liquidity, allowing stakers to deploy their restaked assets in DeFi applications to generate additional rewards without affecting their (re)staking positions. Neither EigenLayer nor Symbiotic allow the creation of native VRTs within the restaking protocol itself:

• EigenLayer requires you to deposit your ETH collateral to a dedicated, and independent LRT provider protocols like Swell or Puffer Finance. All of these LRTs have their individual front ends.
• Meanwhile, Symbiotic has the majority of their LRTs accessible through Mellow Finance, a different protocol altogether.

2. Transfer Hook Rewards: The Liquid Restaking Protocols on Ethereum have not been successful in establishing a concise approach for distributing AVS rewards to LRT holders. $fragSOL, Fragmetric’s VRT built on Jito, utilizes the transfer hook feature of the SPL token extension to precisely track balances over time, ensuring that NCN rewards are distributed accurately based on how long each user has held their VRTs. LRTs on Ethereum have not come close to this level of precision.

Source: Fragmetric

3. Advanced Slashing Mechanics: Jito’s restaking model enables fine-grained control over slashing and penalties, including the ability to set maximum slashable amounts per epoch per operator, ensuring predictable risk exposure. This contrasts with the more straightforward slashing models used by Eigenlayer and Symbiotic, providing Jito users with a nuanced risk management approach.

InfStones’ Partnership With Jito

InfStones is dedicated to supporting innovation in staking services, and we’re excited to announce our plans to support Solana Restaking through Jito. InfStones has been a proud partner with Jito, leveraging their validator MEV software for some time now, and we’re thrilled with the results! Our ongoing collaborations help secure Solana’s decentralized services while unlocking enhanced reward options for our users.

As Jito Restaking progresses through testnet, InfStones is at the forefront of the entire ecosystem with existing and ongoing partnerships with several leading NCNs including:

Sonic - Sonic is the first SVM Gaming Chain, expanding Solana's gaming ecosystem from FOGCs, action-shooters, Web3 casinos and more. It is powered by HyperGrid - an infrastructure stack for deploying interoperable SVMs on Solana, powering a shared state network for building an interchain SVM future. Sonic and InfStones will soon enter into a strategic infrastructure collaboration - stay tuned!

Switchboard - Switchboard is a decentralized, community curated oracle network built with the goal of making all data, on-chain and off-chain, easily accessible for developers. Combined with Solana's low transaction fees and high throughput, Switchboard unlocks new use cases around DeFi, NFTs and Gaming. InfStones has been supplying Data Oracle services to Switchboard since 2022.

In addition, InfStones has recently partnered with Fragmetric as one of their exclusive Node Operators for their fragSOL VRT. Fragmetric is committed to being more than just a VRT; fragSOL strives to be a Liquid restaking Protocol that contributes to the security of the Solana ecosystem.

With extensive experience as a leading Node Operator across shared security ecosystems like EigenLayer, Symbiotic, and Babylon, InfStones brings unmatched technical expertise, industry-best rewards, and competitive fees to stakers in the Jito Restaking ecosystem. Paired with our robust infrastructure and white glove service, we are set to offer a seamless staking experience from day one of Jito’s mainnet launch.

Discover the power of Jito Restaking with InfStones! Maximize your staked assets by unlocking higher rewards, and enjoy liquidity through DeFi integrations of Fragmetric’s VRT. Please follow our X page for updates on the upcoming cap increase for deposits, as well as upcoming partnerships with NCNs built on Jito’s game-changing platform

Article written by Rohit Sarkar, Business Operation Generalist at InfStones.