We plan to implement the UTONIC protocol, which will be the first restaking protocol on the TON network. Similar to how EigenLayer introduced restaking to the Ethereum ecosystem—currently securing 5% of the total ETH supply to protect various applications on Ethereum—UTONIC will bring restaking to the TON ecosystem. This will enhance the security of the growing number of applications on TON, increase the value and yield of TON assets, and encourage more TON holders to participate in staking.
TLDR
- UTONIC is the first restaking solution on the TON network, modeled after Ethereum’s EigenLayer.
- Restaking enhances security and scalability by allowing staked assets to secure multiple decentralized applications. It also increases use cases and yields for TON, concentrating value towards the TON token.
- UTONIC supports both native TON tokens and Liquid Staking Tokens to participate in restaking. The native restaking is based on the Nominator Pool staking.
- The UTONIC architecture consists of several key components: Stakers, Vaults, Restaking Module, Operators, Actively Validated Services (AVS).
Background
Restaking allows staked assets to be used for securing multiple networks or protocols simultaneously. Restaking enables the same tokens to be utilized across multiple layers, increasing the utility and potential returns for token holders. This method also enhances security and decentralization by allowing stakers to support various applications without needing to acquire additional assets.
Restaking was first introduced into the Ethereum ecosystem by EigenLayer, a pioneering restaking project on the Ethereum network. It leverages staked ETH to secure and protect additional dApps and protocols built on Ethereum. As of now, EigenLayer has managed to lock up 5% of the total ETH supply (4.7 million ETH, $12B TVL), supporting more than 16 Actively Validated Services (AVS).
Following the emergence of EigenLayer, restaking has become one of the hottest topics in the industry. Beyond Ethereum, other networks like Solana and BNB Chain have begun developing their own restaking protocols. For instance, Solayer handles restaking on Solana, while BinLayer does so on BNB Chain. Currently, however, there is no restaking protocol available on the TON network.
| Blockchain Network | Restaking Protocol |
|---|---|
| Ethereum | EigenLayer/Symbiotic/Karak |
| Bitcoin | Babylon/Satlayer/Pell |
| Solana | Solayer |
| BNB Chain | BinLayer |
| TON | UTONIC is coming |
Why is TON Restaking Important?
The Open Network (TON) is a decentralized and open internet platform focusing on achieving mass adoption while operating in a highly scalable secure framework. TON has now become one of the top ten public blockchains by market capital.
TON restaking is crucial as it enhances the security and scalability of the TON ecosystem by allowing existing staked assets and methods to be used in securing additional decentralized applications and services, where many of them will choose hybrid on-chain and off-chain structure to serve reaching hundreds of millions of users moving forward. This approach leverages the network’s existing validators, creating a more robust, flexible and economically-efficient infrastructure without the need for new resources.
Restaking Benefits:
- For TON Ecosystem: The network structure of TON Layer 1 is well-suited for certain applications, but there are also scenarios where it may not be the best fit, like where it needs atomic transactions and synchronicity. In these cases, Layer 2 solutions and Bridges are often required to meet the development and usage needs of such applications. TON Restaking can enhance the security of these Layer 2 solutions and Bridges, thus fostering the growth of the TON ecosystem.
- For TON Applications: New applications can build on a robust security foundation provided by TON restaking, thus encouraging innovation and leading to broader adoption within the ecosystem.
- For TON Holders: TON will have more use cases, resulting in greater yields for staking. Applications will rely on TON for security rather than issuing new assets, leading to a concentration of value towards the TON token.
Native Restaking: Based on Nominator Pool
There are currently several ways to participate in TON staking, which can generally be categorized into two types:
- Using a Hot Wallet for Staking: This method is less secure because the wallet holding the funds needs to be kept on the validator node, making it vulnerable to hacking.
- Using a Nominator Pool for Staking: This approach allows users to separate the wallet holding the funds from the validator wallet, enabling secure participation in staking.
The Nominator Pool is an excellent smart contract design that greatly enhances the security of TON staking. More importantly, it is a smart contract that can be further improved, giving us the flexibility to build on it and implement the restaking functionality.
UTONIC smart contracts will delegate the staked TON to the established Nominator Pool for participation in TON staking, while also opting into the restaking modules built on UTONIC. A key function of the UTONIC smart contracts is to act as the deployer, fund provider, and fund withdrawer for the Nominator Pool. If a staker who has restaked on UTONIC is proven to have behaved adversarially while participating in an AVS, then that staker’s TON will be withdrawn from the Nominator Pool and be slashed according to the on-chain slashing contract of the AVS.
LST Restaking
In addition to supporting native TON tokens for restaking through an upgraded Nominator Pool, we also support LST (Liquid Staking Token) participation in restaking. Our decision to support LST restaking is based on the following considerations:
- Established LST protocols have already implemented the core functionalities for participating in Layer 1 staking and distributing staking rewards, ensuring that the LST tokens are backed by a corresponding amount of staked TON assets.
- Using LST tokens for restaking has proven to be a viable solution in Ethereum’s restaking ecosystem, with successful implementations seen in projects like EigenLayer and Symbiotic.
- Supporting LST participation in restaking prevents the need for TON tokens to be withdrawn from LSTs solely for restaking purposes, thereby improving the whole capital efficiency within the TON ecosystem and offering convenience to TON users.
LRT: Liquidity Creates Value
Beyond implementing the basic restaking framework, we also support minting Liquid Restaking Tokens. This approach helps to prevent liquidity shortages within the ecosystem that can arise when assets are locked up in staking and restaking.
The Whole Restaking Architecture
Stakers
Stakers contribute to universal security from TON in exchange for rewards.
Vaults
Vaults act as the restaking management layer for TON restaking.
Restaking Module
The Restaking Module is a suite of smart contracts that handle the core logic for delegation, operator registration, AVS registration, reward distribution, and slashing.
Operators
Operators, whether an individual or an institution, perform essential validation and security for distributed secure services.
Actively Validated Services (AVS)
Actively Validated Services utilize the restaked TON to enhance security while reducing operational expenses.