Great question! Dual staking refers to systems where two different types of tokens are staked to secure a network or protocol, each serving a distinct purpose.
The specific token pair varies by project, but here’s a breakdown of the general model and key examples:
Core Concept of Dual Staking
Typically, the two tokens represent:
Network's Native Token: For protocol governance, utility, and "cryptoeconomic" security.
Exogenous/Real-World Asset Token: Often a liquid-staked version of a major asset (like ETH), providing "real-world" economic security and capital efficiency.
Common Token Pairs in Dual Staking Models
| Protocol / Network | Token 1 (Native) | Token 2 (External/Real-World) | Primary Goal |
|---|---|---|---|
| EigenLayer (Ethereum Restaking) | Not applicable in the same way. Acts as a platform for LSTs and LP Tokens. | Liquid Staking Tokens (LSTs): stETH, rETH, cbETH, etc. | Restaking ETH's security to secure other protocols (AVSs). |
| Babylon (Bitchain Restaking) | Not applicable (early stage). | Bitcoin (BTC) via timelocked scripts. | Export Bitcoin's security to PoS chains and other systems. |
| Karak | KARAK (governance & fee accrual) | LSTs (stETH, etc.), LP Tokens, LRTs. | Generalized restaking with its own network layer. |
| Layer 2s (Proposed Models) | L2 Governance Token (e.g., future ARB, OP) | ETH or stETH | Enhance L2 security by backing it with both L2-native value and ETH's value. |
Why Dual Stake? Key Benefits
Enhanced Security: The security budget (total value staked) is not limited by the market cap of the native token alone. Adding a high-value asset like stETH significantly increases the cost to attack.
Capital Efficiency: Holders of the major asset (e.g., ETH stakers) can use their already-staked assets to secure another network without unbonding.
Improved Token Utility: The native token gains clear value accrual (fees, penalties) and governance power within the dual-staking model.
Risk Diversification: Security relies on two independent asset classes, potentially reducing correlated failure modes.
Important Considerations & Risks
Complexity: Dual-staking introduces more complex slashing conditions, governance, and economic design.
Layered Risks: Stakers often face additional slashing risk on the new protocol on top of the base risks (e.g., slashing on Ethereum for stETH).
Liquidity & Volatility: The security budget fluctuates with the prices of two assets, which may be correlated or uncorrelated.
Dominant Examples: The most active "dual staking" ecosystem today is EigenLayer, where the primary staked assets are Liquid Staking Tokens (LSTs) like stETH, rETH, and soon, native ETH. Babylon is pioneering this for Bitcoin.
In summary, the most common "tokens staked" in dual-staking setups are a project's native governance token paired with a high-value, widely-held liquid staking token (like stETH) or even directly with Bitcoin. The goal is to bootstrap stronger, more capital-efficient security.
