Mellow Protocol is an innovative liquid restaking protocol designed to operate within the dynamic environment of the AVS ecosystem. Mellow Protocol offers a series of vault smart contracts tailored to different risk profiles, managed by curators. These vaults rely on the inherent flexibility, composability and security of both Ethereum and restaking providers to mitigate AVS risks effectively.

The architecture of Mellow Protocol is engineered to adapt to the varying needs of its users while maintaining a high standard of security and transparency. By allowing permissionless LRT curation, Mellow enables depositors more flexibility regarding their desired level of exposure to risk, while still benefiting from the liquidity of staked assets. This is achieved by dynamically adjusting strategies within each vault based on real-time risk assessments and market conditions.

Mellow’s smart-contract framework is built to be extensible, allowing for the seamless introduction of new features and vault types with minimal changes to the existing codebase. This ensures a low attack surface while facilitating the development of additional products and services.

To further enhance its robustness and functionality, Mellow Protocol integrates with a variety of DeFi primitives and infrastructures. This integration provides best user experience, enabling seamless interaction with other financial tools and services within the ecosystem. Future iterations of Mellow Protocol are planned to include advanced features such as dynamic rebalancing of vault allocations to optimize risk-adjusted returns and minimize potential losses due to market volatility.

  • Overview of Restaking

    • Through restaking protocols, stakers can choose to accept additional slashing conditions on their staked ETH for rewards from protocols whose state is secured by stakers’ assets.

    • Typical design enables the validation of various modules, including consensus protocols for L2s and appChains, data availability layers, virtual machines & application layers, creating new revenue opportunities for restakers.

    • Restaking protocols share the abundant security of Ethereum consensus by spilling it over to these modules, enhancing the reliability of their consensus and adding extra revenue source to restakers.

  • Launching LRTs will be permissionless for curators/users

    • Although LRTs permit delegation to multiple AVS operators, permissioned LRT holders and LRT node operators have little to no choice in how these delegation sets are formed or how risks are managed.

    • Holders can only make adjustments by changing the amount of LRT to which they are exposed.

    • Allowing LRT curators to issue new LRTs with refined risk/reward ratios in a permissionless manner makes the possibility of malfunctions causing ripple effects and liquidation cascades across the entire ecosystem remote and unlikely.

  • Fees mechanism for curators

    • LRT curators are incentivized to set a competitive fee on restaking revenue. Mellow plans to aid LRT curators to launch permissionless LRTs with deployment, maintenance and DeFi integrations.

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