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Cross-staking (or “restaking”) has become one of the most hyped narratives in the crypto space. Cross-staking refers to the deployment of the same collateral as the economic stake in multiple consumer infrastructures. Stake rehypothecation can improve capital efficiency and reduce price risk, as the collateral deployed from cross-staking is often less volatile.

Notable examples of cross-staking include Avalanche subnets (i.e., Avalanche-based sidechains) that can source security from AVAX-staked validators from the Avalanche primary network, as well as some Cosmos consumer sidechains that are secured by ATOM-staked validators from the Cosmos Hub if approved by Cosmos Hub governance.