🤝Restaking

Why Ditto leverages restaking and how it is beneficial for users

Integration with restaking protocols like EigenLayer and Symbiotic enhances the economic security of Ditto's automation execution network by leveraging slashing mechanisms and third-party staked assets to ensure operator accountability. Here’s a breakdown of how it works and why it’s superior to traditional token-based approaches:

1. Economic Security via Restaking

In Ditto’s system, operators execute predefined automations on behalf of users. By integrating with restaking protocols like EigenLayer and Symbiotic, Ditto can “borrow” the economic security of these networks, tapping into their substantial existing stake pools rather than relying solely on its own token. This means operators must lock up assets from these restaking pools as collateral, which can be slashed if they fail to execute tasks within the agreed parameters, such as time constraints or accuracy.

2. Benefits of Slashing for Reliable Execution

Slashing incentivizes timely and correct execution by putting operators’ staked assets at risk if they underperform. If an operator fails to execute an automation within the designated time frame, a portion of their collateralized stake can be forfeited, deterring future non-compliance. This deterrence is stronger when using restaked assets from protocols like EigenLayer and Symbiotic, as the operators’ slashed stake isn’t limited to a single token but includes assets with substantial, multi-protocol liquidity and value.

3. Advantages Over Traditional Token Utilization

Traditional automation solutions typically rely on their native tokens to incentivize and secure operations. However, this approach faces limitations:

• Liquidity Challenges: Native tokens often lack deep liquidity, which constrains the slashing mechanism since forfeited tokens may be difficult to sell without substantial price impact, reducing the punishment's effectiveness.

• Low TVL (Total Value Locked): To maintain competitive rewards for stakers, high APYs are often required, which can discourage substantial, long-term capital allocation. With low TVL, the network’s economic security is limited, undermining the trust in its automation reliability.

In contrast, restaking protocols bring in diversified assets and higher liquidity, ensuring that slashing events have more economic impact. By utilizing well-established, restaked assets, Ditto's network achieves higher economic security without having to provide unsustainably high APYs on its own token. Additionally, leveraging protocols with larger ecosystems fosters higher total value locked (TVL), giving users confidence that the system is secure against non-compliant operators.

Summary

By integrating with restaking protocols, Ditto can ensure that operators are held accountable through a robust slashing mechanism backed by economically substantial and liquid collateral. This approach is more effective than traditional token-based security models, as it minimizes liquidity issues and reduces dependency on high APYs to attract participation, creating a more stable and secure environment for automation execution.