Restaker Risks

Restaking can be a high-yield activity, but it introduces service-level risks beyond “holding a token”. This page summarizes the main risks restakers should understand before delegating.

Slashing Exposure

When an operator is slashed for a blueprint service, both:

• The operator’s self-stake, and
• Delegations exposed to that blueprint

can lose value. Slashing reduces withdrawable value using share/exchange-rate accounting.

All vs Fixed

• All mode: your delegation is exposed to every blueprint the operator participates in.
• Fixed mode: your delegation is exposed only to the blueprint IDs you selected.

If you want to scope risk, prefer Fixed mode and keep your blueprint list intentionally small.

Operator Concentration Risk

Delegating to a single operator concentrates risk:

• Operational outages
• Software bugs
• Misbehavior leading to slashing

Diversify across operators and blueprint types if your risk tolerance requires it.

Payment Token and Oracle Risk

Service fee revenue may be paid in different tokens per service. If the protocol uses USD normalization (via a price oracle) for some scoring paths, oracle configuration and oracle failure modes can affect reward distribution.

Exit and Liquidity Risk

Exiting restaking is typically not instant:

• Unstaking is delayed by a protocol-defined waiting period.
• Withdrawals require that your assets are not currently delegated.

Plan for delayed liquidity, especially if you are delegating to high-risk services.

Deposit Lock Risk (Multipliers)

Some incentive paths allow deposit locks (e.g., 1–6 month multipliers). While locked:

• You cannot withdraw the locked portion.
• You remain exposed to slashing for the selected blueprints.

Liquid Delegation Vault Risk

If you use a liquid delegation vault:

• You are taking on additional smart-contract risk (the vault wrapper).
• Redemptions are asynchronous and depend on the underlying unstake delay.
• Vault shares can trade at a discount/premium to underlying due to liquidity and exit timing.

Smart Contract Risk

Tangle’s protocol contracts are on-chain software. Bugs, upgrades, or configuration changes can affect funds and rewards. Consider the risk of upgrades and governance decisions when delegating.

See Slashing for the on-chain slashing lifecycle.