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Restaking Vault Strategy

Symbiotic Restaking

The vault targets high-yield opportunities, including “slashable” networks that offer higher returns but risk collateral loss, and safer, non-slashable networks with lower yields. Key objectives include:

  • Diversifying across networks and operators to spread risk.

  • Capping exposure to high-risk networks to limit worst-case losses.

  • Maximizing risk-free yields from non-slashable networks.

  • Monitoring on-chain (e.g., validator uptime, slashing events) and off-chain signals for real-time adjustments.

Delegation Target Selection​

The vault selects networks using a rigorous framework:

  • Technical Risk Assessment: Evaluates network smart contracts, slashing mechanics, and audits to score software risk, incorporating external analyses and Credio’s risk oracle.

  • On-Chain Metrics: Tracks validator uptime, missed blocks, slashing history, and reward rates. Networks with strong performance and sustainable yields are prioritized.

  • Off-Chain Signals: Uses risk models from Credio, assessing governance, communication, and community trust. Networks with poor governance (e.g., centralized control) are avoided.

  • Yield Potential: Prioritizes high-APR networks with acceptable risk. Non-slashable networks (e.g., Radius, Ditto, Kalypso) are fully allocated for safe yield, while slashable networks (e.g., Primev, Hyperlane) start with small, conservative stakes. OETH’s yield-bearing nature and liquidity make it ideal collateral, boosting overall APY by combining ETH staking returns with Symbiotic rewards.

Dynamic Reallocation​

The vault adjusts OETH allocations in real-time using:

  • Yield Tracking: Shifts stake to higher-yield networks if risk is acceptable, or away from underperforming ones.

  • Slashing Risk Signals: Automatically reduces exposure via a “delegator hook” if slashing occurs or validators show issues (e.g., downtime).

  • Periodic Rebalancing: Weekly resets to target allocations based on yield and risk updates.

  • Allocation Caps: Limits slashable network exposure (e.g., 20% max per risky network) to prevent over-concentration.

Rebalancing Triggers​

  • Validator Downtime: Reduce stake if uptime drops.

  • Slashing Event: Withdraw stake immediately.

  • Yield Spike/Drop: Adjust allocations to capture or avoid opportunities.

  • Risk Downgrade: Scale back if a network’s risk score worsens.

  • New Network: Trial small stakes in vetted networks.

Risk Management​

To mitigate slashing:

  • Diversification: Spreads OETH across multiple networks and 3–5 reputable operators.

  • Slashing Caps: Sets maximum loss per network (e.g., 5% of vault).

  • Monitoring: Tracks on-chain data and off-chain signals (e.g., governance changes) with alerts for quick action.

  • Risk Scoring: Excludes high-risk networks; limits stake to riskier ones.

  • Simulations: Stress-tests allocations to minimize worst-case losses.

No slashing has occurred on Symbiotic mainnet, but the vault is designed to prevent and respond to such events.

Conclusion​

The Untangled Credio OETH vault balances high yields with disciplined risk management. Key steps include:

  • Launch Mix: Maximize non-slashable networks; allocate small stakes to vetted slashable networks (e.g., Primev, Hyperlane).

  • Operators: Onboard multiple high-quality operators with slashing limits.

  • Safeguards: Enable delegator hooks, set slashing caps, and deploy real-time monitoring.

  • Dynamic Tuning: Test and refine rebalancing logic; adjust caps as performance data emerges.

  • Transparency: Share weekly reports on allocations, yields, and risks.

This strategy positions the vault to outperform vanilla staking while safeguarding depositors, with ongoing refinements as Symbiotic evolves.