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Vault Overview

Karak uses an implementation of the ERC4626 tokenized vault standard as the default vault to handle ERC20 tokens as restaked assets. However, Karak also provides a base vault interface which can be implemented by developers who want to bring in their own vault implementations. This enables an unlimited amount of customization to meet the needs of any DSS or restaker. Refer to the vault developer guide for more information on how to build your own vault.

Supported Assets

ERC20

The standard Karak ERC4626 vault accepts ERC20 tokens by default and issues a receipt token for it. Only the following ERC20 tokens are currently supported:

  • standard tokens
  • rebasing tokens

However, the standard vault can be modified to accept more types of tokens.

Native restaking

Native restaking enables users to restake ETH staked on the beacon chain by pointing the Withdrawal Credentials of the validator to a Karak NativeNode. Refer to the native restaking section for an in-depth explaination on how Karak enables you to restake your staked ETH.

Other Asset Ideas

Following are some more asset ideas that you as a developer could start implementing and integrating with Karak:

  • Custodied Restaking: A custodied restaking vault allows users to stake their assets with a custodian, who then promises to burn the assets if slashed. Though this is a centralized solution, the vault architecture of Karak allows for this type of vault to be created as long as DSS are willing to accept the custodian's promise.

  • ERC721: An ERC721 restaking vault allows users to stake their NFTs instead of a fungible token.

Vault Extensions

Assets

ERC20

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.