Restaking
Collateral used to mint lvlUSD will be deposited into protocols like Symbiotic, Karak, and Eigenlayer where they will be used to secure AVSs.
How restaking works
When users mint, their collateral will be sent to the
LevelReserveManagerand deposited into approved yield sources.The Level operator multisig will periodically allocate the underlying collateral to vaults on restaking protocols delegated to Level's operator partners. Level plans on supporting Eigenlayer, Symbiotic, and Karak initially.
To accommodate rebasing tokens like Aave's aTokens, underlying collateral may be wrapped ERC20s deployed by Level.
Though each has its nuances, assets allocated to restaking vaults (also sometimes known as strategies) let decentralized networks (aka AVSs) and operators for these networks opt into using the vaults for economic security
To facilitate redemptions, the Level multisig can also withdraw assets from each restaking network periodically. Restaking protocols implement a cooldown period on redemptions (typically 7-10 days).
What gets restaked
AVSs are being secured by receipt tokens from lending protocols like Aave. If receipt tokens are rebasing, they are wrapped into a different ERC20 contract for a couple reasons:
Wrapped rebasing tokens are much easier to deal with than rebasing tokens for the protocols they are deposited into because protocol developers don't need to worry about accounting for a smart contract's changing balances.
Wrapped rebasing tokens make it easier for Level to distribute yield to slvlUSD holders.
The wrapped tokens are based on OpenZeppelin's ERC20Wrapper contract.
Currently, the following wrapped token contracts exist:
Operators
Level has partnered with the following node operators who have prior experience running AVS nodes on EigenLayer:
PierTwo
Luganodes
Kiln
Finoa
firstset
A41
ChorusOne
DSRV
Cosmostation
NodeOps
DAIC
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