Written by: Xingxing
In 2024, the restaking market witnessed a dramatic shift from an emerging narrative to a groundbreaking reality. At the same time, the decentralized value of BTC and the popularity of new things such as Ordinals have shifted people's attention back to the Bitcoin ecosystem, and the "BTCFi Summer" is about to begin.
As the first AVS network based on re-staking in the BTC ecosystem, Pell Network has reached a TVL of $190 million within 3 weeks of pre-launch, attracting the participation of 220,000 independent addresses. These impressive data not only demonstrate the popularity of Pell Network in the market, but also reflect the great interest of users in understanding or participating in Pell Network.
So, what is the origin of Pell Network? This article will analyze this cutting-edge protocol from the perspective of the market prospects of the BTC re-staking track, the Pell Network technical architecture, application scenarios, and platform ecology, to help users gain a deeper understanding of the latest developments in the Bitcoin re-staking ecology.
BTC re-staking track, good news for BTC stakers
For a long time, a major problem facing BTC holders is how to maximize the yield of their assets. Traditional BTC holding methods are limited to holding and trading, and the income channels are relatively limited. With the emergence of Liquid Staking, BTC holders can obtain passive income by staking their assets, increasing the utilization efficiency of BTC, but these do not seem to meet the needs of current users.
The re-staking track will completely solve this problem. EigenLayer has proven the feasibility of the re-staking track in the Ethereum ecosystem. The protocol has attracted $15 billion in locked-in value (TVL), accounting for 4% of Ethereum's market value (US$370 billion). EigenLayer not only uses LSD assets to create a huge re-staking ecosystem, but also further becomes the consensus layer that carries Ethereum security.
These successful experiences were quickly adopted by the Bitcoin ecosystem. Babylon was the first to be launched as a protocol focusing on BTC native staking. After users stake their native BTC to Babylon, the protocol will use the staked BTC to help protect the PoS chain and verify transactions on the chain. In return, the PoS chain will provide security benefits to Babylon and BTC holders. Babylon makes non-staking BTC staking-able, completing the transition from 0 to 1.
As an extension of Babylon, Pell Network allows BTC LSD holders to re-stake their tokens, and realizes cross-chain interoperability and programmable trust, fully extending the security of BTC assets to the entire Bitcoin ecosystem and even other mainstream public chains. Pell Network is perfectly combined with Babylon to help the Bitcoin staking ecosystem complete the leap from 1 to 100. According to rough estimates, there is a possibility that a unicorn agreement with a TVL of over 45 billion US dollars will appear in the Bitcoin re-staking track, and Pell Network has become one of the leading competitors.
Pell Network Technical Architecture
Pell Network is the first full-chain AVS (Actively Validated Services) network, providing crypto-economic security for decentralized infrastructure through BTC LSD (Liquid Staking Derivatives) re-staking assets.
The Pell Network not only fills a security gap in the ecosystem, it also significantly reduces the cost of building decentralized applications and provides passive income to BTC holders.
In short, the Pell Network ecosystem consists of three main roles: stakers, operators, and developers. In this system, stakers participate in network activities by staking BTC LSD into the Pell Network. Operators are responsible for managing and running the AVS network in the Pell Network, using BTC LSD to enhance the security of the network. At the same time, developers focus on designing and adjusting the penalty and reward mechanisms for decentralized systems.
1. Pell Network re-pledge assets
Pell Network offers multiple avenues of yield, allowing stakers to earn additional income by securing new AVS (Active Verification Services). Broadly speaking, these assets can be linked to three different layers of the blockchain: the core protocol, AVS, and DeFi. Liquidity staking can be seen as accumulating yield by first entering the core protocol and then entering the DeFi layer. In Pell Network, there are several forms of re-staking:
Pell Network Re-staking Asset Flow
Native re-collateralized assets: Validators can re-collateralize their BTC by pointing their withdrawal vouchers to the Pell Network contract. This is equivalent to a BTC → Pell Network income stack.
LSD re-collateralization: Validators can re-collateralize their LSD (BTC already staked through other protocols) by transferring it to the Pell Network smart contract. This is equivalent to the DeFi → Pell Network income stack.
BTC LP re-collateralized assets: Validators stake a pair of LP tokens containing BTC. This is equivalent to the DeFi → Pell Network income stack.
LSD LP re-pledge assets: Validators pledge a pair of LP tokens, which includes a liquidity-pledged BTC token. This is equivalent to the BTC → DeFi → Pell Network income stack route.
2. AVS 网络（Actively Validated Services）
Pell Network's AVS Network is one of its core competencies. This innovative system uses the protocol's re-collateralized assets to provide cryptoeconomic security for a variety of audiences and supports customized slashing conditions and reward thresholds.
Regarding the difficult issues of whether the expected revenue of AVS can cover the operating costs of operators and whether operators have sufficient computing resources to participate in the verification of AVS, Pell Network proposed two solutions by designing different modules:
Large-scale AVS
In a large-scale AVS, the total computing workload is evenly distributed across all participating operator nodes. This approach is called horizontal scaling in distributed computing. For example, in a large-scale data availability protocol, data is divided into N blocks, each of which is 2/N the size of the original data, making the total cost of storing the data comparable to the cost of storing the data by only two nodes. In such an AVS, the data processing requirements on each node may be low, but the entire system can achieve high throughput by aggregating the performance of multiple nodes.
Furthermore, compared to traditional blockchain systems, large-scale AVS reduces the reliance on centralized verification, because in blockchains that are not horizontally scalable, the verification costs can be fully shared by operators.
Lightweight AVS
Lightweight AVS consists of tasks that are performed repeatedly by all operators but are very cheap. Examples include verifying certain information using light clients, validating zero-knowledge proofs, running light nodes of other blockchains, and performing oracle price feeds. These tasks have very low computational demands and infrastructure requirements, making them suitable for running on the Pell Network.
Through this layered AVS design, Pell Network can capture most of the potential benefits. This approach ensures that even individually operated validators can obtain substantial economic benefits from Pell Network, effectively alleviating the pressure of centralization on staking.
At present, Pell Network has successfully attracted more than 5 AVS operators to sign letters of intent for cooperation, thanks to its carefully designed AVS network. The network effectively improves the capital efficiency of BTC holders through the re-pledge mechanism and achieves a perfect combination of security, flexibility and efficiency.
Pell Network application scenarios and ecology
As the consensus layer of the ecosystem, Pell Network relies on advanced encryption technology to enhance ecological diversity and security and accelerate the application of innovative technologies. Pell Network provides a solid foundation service for a wider range of upper-layer applications.
Pell Network reduces the cost of developers on security infrastructure, allowing them to focus on business logic. This makes Pell Network extremely suitable for building a variety of new active verification services (AVS), including new blockchains, middleware, and modular blockchain layers, such as oracles and data availability layers. The following are some potential application directions:
Oracle: Pell Network can quickly build an economically secure oracle network, allowing developers to focus more on data processing and feeding without spending a lot of effort on building an independent AVS layer.
Large-scale DA layer: Leverage the re-staking and community power within the Pell Network to build a high-efficiency, low-cost, large-scale data availability (DA) layer.
Light Node Cross-Chain Bridge: It will be very easy to build a light node cross-chain bridge based on Pell Network to pass messages. Stakers can verify cross-chain signatures off-chain. If the challenge event is proven to be a discrepancy, the validator in Pell Network will be fined in slow mode (non-optimistic).
DApps applications: Pell Network aggregates the security of Bitcoin on all modules and is more suitable for DApps applications that rely on data security, such as privacy DeFi protocols, blockchain games, Web3 AI applications, etc.
RWA system: The RWA track in the DeFi sector is usually based on the Yield development model, which will become a market hotspot in the next 3-5 years when combined with the re-staking model. Pell Network has the ability to process and maintain a large amount of underlying data, and will undoubtedly become the first choice for the RWA platform.
Through these application scenarios, Pell Network aims to provide more diversified and efficient services to the blockchain ecosystem, thereby promoting the development and innovation of the entire industry.
Summarize
The vision of Pell Network is to build a decentralized trust-free market, which enhances the economic and security utility of the Bitcoin network through diversified equity options and re-staking mechanisms. Stakers can directly operate nodes or delegate to other node operators to provide security verification services and earn additional benefits, thereby maximizing the capital efficiency of BTC holders.
In addition, Pell Network supports the construction of lightweight and large-scale decentralized components, providing cost-effective solutions for the infrastructure and application security of the Bitcoin ecosystem, thereby promoting the exponential growth and development of the Bitcoin ecosystem.
According to Pell Network's roadmap, the platform will launch a testnet by the end of July and is expected to launch the mainnet in October. In addition, Pell Network is building the first official AVS oracle and will share token incentives with early participants who help build the network.
In the future, Pell Network will continue to promote the development of BTC re-staking and provide safer and more efficient solutions for the decentralized financial ecosystem. If you are a BTC holder or interested in decentralized finance, you may wish to pay attention to the development of Pell Network, join this innovative platform, and share the rich benefits brought by blockchain technology.
