Definition ∞ A restaking token is a digital asset that represents a user’s staked position in a blockchain network, which is then further utilized or “restaked” in other protocols to earn additional yield or provide security. This mechanism allows staked assets to generate multiple layers of rewards or contribute to the security of several systems concurrently. It enhances capital efficiency by enabling assets to serve dual purposes. This innovation expands the utility of staked assets.
Context ∞ The discussion surrounding restaking tokens centers on their potential to significantly enhance capital efficiency and aggregate security across different decentralized protocols. A key debate involves the associated risks, such as increased slashing penalties or smart contract vulnerabilities from multiple protocol exposures. Future developments will focus on creating robust risk management frameworks and clear accountability mechanisms for these complex staking derivatives.
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