Challenges and opportunities for institutional integration of restaking in 2025: Report

Restaking emerged from the dust and quickly gained traction in late 2023. It is adopted mainly by retail investors, while institutional investors are only beginning to explore this niche. Several factors still hinder the institutional adoption of restaking, which include the lack of standardized risk assessment methods and the operational complexity associated with validator and protocol management.

In the recent report, P2P.org, Cointelegraph Research outlines the developmental path of restaking and argues that the eventual institutional integration of restaking products is inevitable despite the uncertainties. The report commences by breaking down the fundamentals of restaking, its core risks and emerging risk-management frameworks. It discusses the evolution of native restaking through distributed validator technology. It also analyzes the challenges institutions face in yield generation today and explores how restaking can address them

Read the complete in-depth examination of control models, validator technology and adoption barriers in restaking. Download the report for free here.

Operational challenges of restaking

The institutional approach to restaking differs significantly from that of retail participants. Institutions require streamlined management processes and robust risk assessment models. Most restaking protocols have yet to implement these features at scale, which does not suit institutions’ purposes.

The new risk vectors introduced by restaking are among the primary obstacles to broader adoption. These risks are difficult to quantify, as the ecosystem lacks historical slashing data and standardized failure scenarios. Beyond exogenous risks, such as smart-contract vulnerabilities or market volatility, the most direct and consequential threat remains slashing.

Slashing is designed to deter valid economic attacks in proof-of-stake networks. It occurs when a validator or operator violates the rules, whether through a deliberate attack or an unintentional failure. In restaking, slashing is an even more significant risk than in traditional staking, because the stake can be delegated to multiple networks simultaneously. Each AVS brings its own set of technical, economic and slashing risks, and even small risks from individual protocols can compound across the portfolio

In restaking protocols, each AVS defines its own slashing conditions and enforcement mechanisms, which must be assessed individually. Some may have minimal slashing risk, while others may penalize even minor faults. Moreover, slashing can be triggered without operator fault if an AVS enforces faulty rules, misinterprets validator behavior or suffers a smart-contract bug that falsely submits slashing evidence.

The layered and often opaque nature of restaking risks and the lack of historical slashing data are some of the main factors that hinder institutional adoption of restaking. Detailed risk disclosures, slashing recovery mechanisms and frameworks for onchain insurance or loss mitigation are necessary for the institutional adoption of restaking. Until protocols provide reliable ways to isolate and price these risks, institutional allocation will grow slowly. Researchers are actively developing proper risk frameworks for restaking, such as a network-level risk evaluation framework by the P2P.org team.

Apart from managing risk, the selection of AVSs is critical because it directly impacts returns. At present, this remains largely theoretical, as most of the AVSs supported by the restaking infrastructure do not yet have sustainable revenue models. Therefore, EigenLayer does not distribute actual restaking APY, but relies on token incentives for restakers at the time of writing. In the future, however, choosing the most in-demand AVSs will be a key driver of the APY generated by restaked assets. This active management involves monitoring AVS performance and demand, adjusting allocations to maximize yield and coordinating with operators or curators to balance potential rewards against associated risks.

Read the complete in-depth examination of control models, validator technology and adoption barriers in restaking. Download the report for free here.

Path for institutionalization of restaking

The evolution of restaking closely mirrors the institutionalization of staking. Liquid staking protocols catalyzed the first wave of Ethereum staking adoption. Restaking follows a similar path, initially adopted by DeFi-native projects, particularly liquid restaking (LRTs) protocols. The next stage is likely to be broader integration by crypto-native institutions, such as centralized exchanges, wallets and custodians.

However, institutional adoption of restaking requires balancing control with operational efficiency. The report outlines three models of restaking: self-controlled restaking, curated vaults, and LRTs. Each of them presents distinct trade-offs between security, flexibility and yield.

Among these, curated vaults are the most effective integration model for institutions. Introduced by Symbiotic, curated vaults are smart contracts that coordinate capital flows between restakers, operators and AVSs. These vaults are highly configurable: The owner can define slashing governance, delegation strategies, withdrawal timelines and more, while delegating operational duties such as AVS and operator selection to vault curators.

This structure balances institutional autonomy with outsourced operational execution. Institutions retain strategic authority over key parameters, while trusted partners are responsible for implementation. As part of a modular architecture, curated vaults separate asset custody, yield generation and execution, which gives institutions more precise control over how their capital is allocated and managed

One of the recent developments in restaking, the Distributed Validator Technology (DVT), offers another compelling way for institutional application of restaking. DVT is an approach to validator security in which key management and signing responsibilities are spread across multiple parties. This allows a single validator to operate across multiple independent nodes, which reduces the risk of slashing or compromised validator keys. DVT gives institutions direct control over staking and restaking products without intermediaries and eliminates single-point failures through distributed validation

The prominent implementation of DVT is the SSV (Secret Shared Validator) Network. It allows the validator to be operated by node operators in a distributed cluster. SSV Network has become one of the key enablers for liquid staking and restaking applications on Ethereum. DVT technology is increasingly adopted by major staking and restaking platforms, such as P2P.org’s SSV White-Label solution, which reduces node operation costs by nearly 90%.

Read the complete in-depth examination of control models, validator technology and adoption barriers in restaking. Download the report for free here.

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