Pell Network’s OmniChain Design: Unlocking New Potential for BTC Restaking Yields

In the restaking sector, a critical issue that demands resolution is the insufficiency of yields. While Total Value Locked (TVL) is undoubtedly significant for restaking projects, achieving sustainable TVL growth and consistently attracting new capital hinges on two key factors: restaking yield rates and the security behind high yields. In essence, a restaking project that can deliver high yields while ensuring the safety of user funds has the potential to disrupt the industry and emerge as a true unicorn.

This article delves into how Pell Network, the first omnichain BTC restaking network, leverages its innovative architecture to help restakers achieve secure and stable high yields.

1. The Mechanics of Restaking

Restaking fundamentally seeks to enhance capital efficiency while strengthening network security. It is an innovative on-chain validation mechanism that allows users to redeploy already staked assets across other blockchains or protocols. This maximizes asset utilization and validation capabilities without compromising the original staking functionality or security.

An Analogy: Restaking as Banking

Consider a banking scenario:

• A user deposits funds into a bank, which pays interest (analogous to the initial staking yield).
• The bank uses these deposits for lending or supporting other financial activities.
• Additionally, the bank allows the user to leverage a certificate of deposit (akin to proof of stake) to engage in further investment opportunities, such as investing in high-grade bonds (restaking).

Key takeaways from this analogy:

• Enhanced Capital Efficiency: Deposits (initial staked assets) remain safely in the account, while certificates of deposit are leveraged for additional investments, generating extra yields.
• Controlled Risk: The safety of deposits is guaranteed, while the risks of financial products are limited to the additional investments and do not affect the principal deposit (restaking protocols ensure the original staked assets remain untouched).
• Collaborative Systems: Deposits support lending operations while certificates of deposit fuel broader investment projects (restaking provides decentralized validation services for multiple blockchains).

In this sense, restaking resembles leveraging certificates of deposit to unlock more investment opportunities. The core lies in maximizing asset efficiency while ensuring security and decentralization, thereby creating more value for the ecosystem.

2. Pell Network’s Innovations in Restaking

Centered on BTC restaking, Pell Network establishes a omnichain trust network that efficiently transforms idle BTC Liquid Staking Derivatives (BTC LSDs) into robust security resources for Decentralized Validated Services (DVS). This technology not only offers BTC holders additional yield opportunities but also fundamentally strengthens the security of blockchain ecosystems, injecting new momentum into cross-chain collaboration.

2.1 Core Framework of Pell Restaking

Pell’s restaking framework includes three key roles:

• Restakers:

Restakers can deploy BTC LSDs to DVS within the Pell ecosystem to enhance service security. They can delegate assets to operators or directly run validation nodes. Restaking and service selection operate on mutual consent, ensuring users maintain control over their staked assets and can freely choose which DVS to support.

• Operators:

Operators run DVS within the Pell network, registering as Pell nodes to provide delegation services. They actively select the DVS services they wish to participate in, generating revenue for restakers in the process.

• Decentralized Validated Services (DVS):

DVS targets projects requiring validation services, incorporating cryptographic enhancements for security and rewarding operators for their contributions. Its goal is to efficiently integrate staked resources into a multi-chain service network, bolstering the security and scalability of blockchain ecosystems.

2.2 How to Achieve High Yields?

Pell’s mechanism for generating high yields is akin to Software as a Service (SaaS) in cloud computing.

SaaS allows users to access software via the internet without purchasing, installing, or maintaining it. By adopting a subscription-based or pay-as-you-go model, SaaS provides flexible, efficient solutions. Key traits of SaaS include shared resources, multi-client service, and usage-based pricing.

In blockchain, Pell Network’s restaking mechanism mirrors the “cloud service” model of SaaS. Restakers delegate assets to node operators, who use these assets to provide DVS for multiple projects, earning revenue and sharing a portion with restakers.

This mechanism operates similarly to the logic behind cloud services: if a server caters to only a small number of clients, its revenue potential is limited. However, when the server supports multiple industries or customer groups, its overall income increases significantly. In Pell, node operators diversify their revenue streams by providing validation services to multiple blockchain ecosystems, which also enhances returns for stakers.

What Differentiates Pell from EigenLayer?

Similarities:

Both Pell and EigenLayer aim to improve the utilization of cryptoeconomic security through shared validation services. They allow stakers to reallocate their staked assets across multiple validation services, providing enhanced security for blockchain ecosystems.

Differences:

• Scope of Services:

EigenLayer’s architecture is akin to a dedicated cloud server for the Ethereum ecosystem, with validation services limited to applications within Ethereum, such as rollups or data availability services. This limitation constrains its revenue potential to the growth of the Ethereum ecosystem.

In contrast, Pell functions as a cloud server offering validation services across multiple blockchains. Its DVS not only supports Ethereum but also extends to BTC, Solana, Move, and other leading blockchain networks. This omnichain capability significantly broadens the demand for validation services, enabling node operators to support projects across various networks, unlocking greater revenue potential.

• Competitive Edge:

Pell’s core competitive advantage lies in the breadth and diversity of its service coverage. By supporting multiple chains, Pell allows its node operators to address a wider range of validation needs across ecosystems, significantly boosting their revenue potential. This growth in income is directly reflected in higher returns for stakers, positioning Pell as a clear leader in restaking returns compared to EigenLayer, which is limited to the Ethereum ecosystem.

3. Restaking Security: How Pell Ensures Asset Safety？

After exploring how Pell achieves high returns, it’s crucial to discuss how Pell ensures the security of restaker’s assets. In previous articles, we simplified this concept by using an analogy: viewing restakers as investors, node operators as asset management companies, and DVS as a pool with various investment assets. Restakers entrust their assets (such as BTC LSD) to the asset management company, which acts as an intermediary to make investments based on demand.

In this analogy, investors face market risk, which is uncontrollable. For instance, if an investor buys corporate bonds, changes in market interest rates will directly affect bond prices, yet the asset management company cannot control these rate fluctuations. Market risk is an unpredictable and uncontrollable factor.

However, in Pell’s restaking system, investors do not face market risks. As long as node operators fulfill their duties and complete validation services for DVS, investors will earn stable returns, similar to the interest from a fixed deposit. Therefore, from a risk perspective, restaking offers certainty in returns and significantly reduces risks.

The only potential risk is malicious behavior by node operators, akin to corruption or embezzlement by asset management companies. To ensure the compliance of node operators, Pell Network implements multiple safeguards at different levels:

• Financial Safeguards:

One requirement for becoming a Pell Network node validator is to provide security support for DVS through restaked BTC and perform a variety of service functions. Operators can choose to restake their own BTC or use liquid staking derivatives (such as Lombard’s LBTC). Additionally, operators can accept token delegations from other restakers.

• Technical Safeguards:

We can think of a PoS network as a strong fortress, surrounded by many soldiers (node validators) guarding it. Normally, these soldiers are tasked with protecting the fortress. Pell Network gives these soldiers an additional mission: without leaving the fortress, they also protect nearby villages (i.e., DVS). If a soldier misbehaves, they will be penalized (slashed) to ensure they remain diligent in their duties. In this way, the villages can benefit from the fortress’s strong security without needing their own army (economic security).

• Dynamic Hidden Committee (DHC): Pell uses the DHC mechanism to ensure the anonymity of node identities and regularly rotate members. This mechanism ensures that the identity of the guards remains hidden, and the guards are periodically rotated to prevent collusion and malfeasance. It enhances defense capabilities and ensures the security of both the fortress and villages, avoiding security loopholes.

• Ring-Verifiable Random Function (Ring VRF) + Trusted Execution Environment (TEE): Pell introduces the Ring VRF algorithm to ensure the anonymity of committee members and the randomness of the election process. Furthermore, all operations are conducted within the TEE environment, ensuring system integrity and confidentiality while preventing external interference and data leaks.

This can be seen as a mechanism where the guards are randomly selected. Ring VRF ensures the fairness of the election process, while TEE guarantees that each soldier is unaware of which village they will protect or which other soldiers they will work with, further reducing the likelihood of coordinated malfeasance.

Through these advanced technical measures, Pell not only effectively safeguards restakers’ assets but also sets a new industry benchmark for the security of multi-chain ecosystems and decentralized validation services.

Conclusion

Pell Network redefines the revenue logic and security of the restaking sector with its omnichain architecture. With support for multi-chain ecosystems and innovative validation mechanisms, Pell not only delivers higher returns for users but also offers new insights into collaborative models for the blockchain industry.

About Pell :

Pell: The First & Omnichain BTC Restaking Network, extending BTCFi into the cryptoeconomic security domain and fully unlocking Bitcoin’s potential.

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