Karak Overview

Accelerating the new Internet with Universal Security

What is Karak?

Karak is the universal restaking layer that makes it easy to provide cryptoeconomic security with any asset, and unlocks a new design space for developers to seamlessly and securely create innovative infrastructure designs.

Karak enables protocols to tap into robust and secure trust networks from day one, significantly lowering the barrier to securing new protocols and eliminating the need for protocols to incentivize their own validator sets with a highly dilutive reward mechanism, making the process of bootstrapping security more scalable, accessible, and affordable.

How does Karak work?

Karak enables users to repurpose their staked assets to extend Ethereum as well as other trust networks' security to other applications.

Stakers can allocate their assets to a Distributed Secure Service (DSS) on the Karak network and agree to grant additional enforcement rights to their staked assets. The opt-in feature creates additional slashing conditions to meet the conditions of secured services such as data availability protocols, bridges, or oracles. The slashing conditions enforce participant integrity and ensure the security of the applications utilizing Karak is upheld.

Karak operates as a marketplace where developers get to incentivize validators to allocate their restaked assets to secure their secured services. This is a step-improvement to applications having to issue their own highly inflationary tokens as rewards for validators and having to establish a new trust network from the ground up. With Karak, developers can make it attractive for validators to choose their projects through simple, non-dilutive incentives. This significantly reduces the financial and temporal investment required compared to building a new trust network from scratch.

Furthermore, Karak's universal restaking facilitates enhanced bootstrapping and composability across various networks. Despite the varying staking parameters of different blockchains, introducing a multi-asset restaking approach can help standardize these capital requirements.

How is Karak different?

Multiasset restaking: Karak introduces multiasset restaking, a new primitive in cryptoeconomic security allowing users to restake assets such as ethereum, liquid staking tokens, stablecoins, and more to earn rewards. In Karak, restakers have the ability to provide a basket of assets to a DSS, or a Distributed Secure Service, preventing a single asset's failure from compromising a DSS. This flexibility allows DSS to become economically self-sustaining without having to issue highly inflationary awards.

Restake anywhere: Karak enables developers to focus more on innovation and building products wherever their users are instead of where the infrastructure is available. Currently, developers have to use complex, unsafe, and expensive message bridges to access restaking infrastructure beyond Ethereum mainnet. However, most applications and users aren't on Ethereum L1, they are on L2s, sidechains, and in some cases other blockchains entirely. Karak's unopinionated design enables every chain to have restaking infrastructure natively deployed and secured with its own set of assets.

Turnkey development: Karak enables developers to easily iterate and deploy new, unique services secured by a robust and secure trust network on day one. Karak's suite of tools and SDKs allow existing dApp developers to extend or create new functionality for their applications with ease. Karak's K2 network enables cutting-edge DSS's to experiment with custom precompiles and a steady pool of restaking capital.

Ecosystem Overview

Karak’s architecture consists of several key components.

Restakers

Restakers contribute to universal security across Ethereum and other blockchains in exchange for rewards.

Distributed Secure Services (DSS)

Distributed Secure Services utilize the restaked assets to enhance security while reducing operational expenses.

Example: Several Distributed Secure Services will be unveiled in the coming weeks, including core services incubated by Karak contributors.

Chains

Chains or rollups leverage the services rendered by distributed secure services.

Example: K2 is a risk management L2 currently built on top of Karak that will leverage services provided by distributed secure services. As performing operations and activities on the L1 can be prohibitively expensive for both developers and users, K2 will also serve as the de facto sandbox for all DSS's to develop, test, and launch mission-critical protocol upgrades before having to enshrine services on the L1. Moreover, by adding custom precompiles that enable even more validators to validate DSS's, K2 is providing the infrastructure that will allow for services to become more decentralized than ever before.

Operators

Operators, whether an individual or an organization, perform essential validation and security for distributed secure services.

Restaking methods

For now, users can participate in restaking through several methods, including:

• Liquid Staking/Restaking: Users have the option to restake by depositing their Liquid Staking Tokens (LSTs) or Liquid Restaking Tokens (LRTs) into Karak smart contracts. Validators can take LSTs or LRTs that have already been staked in protocols like Lido, Rocket Pool, Mantle, and Etherfi and restake these assets on Karak.

• Stablecoins: Another novel method is giving users the ability to restake by depositing their stablecoins into Karak smart contracts. Validators can take stablecoins that have already been staked in protocols like sDAI and restake these assets on Karak. The advantage of stablecoins for restaking is that the lack of volatility makes it easier for a DSS creator to forecast the amount of economic security they can offer.

Extensions

Karak's extensible design provides DSS creators with a new design space unlocking infinite innovation

• Asset Limits: Every DSS will require a different amount of economic security depending on what it secures. Some DSS's will express the maximum amount of economic security that they need. Enabling asset caps allows DSS to control supply and help produce more sustainable yields that are less susceptible to being compressed.

• Reward Stacking: A critically overlooked component of a DSS's design is its economic sustainability. The rewards that a staker is given has to increase proportionally with the additional slashing risks they are exposed to from restaking. A sustainable model can only be achieved through the acceptance of assets with a lower cost of capital than ETH. For example, if a DSS accepts Aave aTokens, which produces a market yield, the additional yield a DSS has to offer to make it worthwhile for the staker is much less than the raw asset itself.