Suggestion to offer liquid staking at Common Good Parachain

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Related topics are:

Allow "Restaking" of relay-chain stake through custom slashing privileges

The hard part of gathering security for any staking protocol is gathering the amount of on-chain stake required to make the cost of buying out the protocol prohibitive. However, PoS systems have the property that once stake is staked, it can be reused for multiple purposes without inhibiting the security of any of those purposes. In Polkadot, we can implement restaking by allowing validators to specify a custom AccountId which is allowed to slash them. Parachains themselves can act as accounts …

and

Polkadot: The centralized decentralized ecosystem - a cartel?

I believe this question of whether additional relay chains harm security is important, fascinating and off-topic. That is, it is a question of capital availability/allocation and possibly relay chain federation design. Unless someone has beaten me to it, I’ll open a thread on this once I’ve collected my thoughts.

I say the latter is related because my, initial, view is that the way to decentralize Polkadot is via a limited/specialized rehypothecation functionality (restaking/liquid-staking) targeting, i.e. limited to, leveraging the Polkadot security-capital for relaychains. Specifically, I think the objective that …

@rphmeier

This would open up the possibility of parachains adding ‘first-class’ functionality to Polkadot by enabling validators to opt-in to do more work with the same stake, like EigenLayr does for Ethereum.

could actually be extended to the objective that …

This would open up the possibility of relaychains, adding ‘first-class’ functionality to Polkadot by enabling validators to opt-in to earn more rewards with the same stake, like EigenLayr does for Ethereum.

Hence, I believe such limited/special-purpose rehypothecation functionality would best be added to Substrate.

Thoughts?