@c456321d

When does restaking leverage lead to margin calls? Restaking leverage leads to margin calls in two primary scenarios: price depreciation and slashing. First, if the value of the collateral (e.g., stETH) declines significantly against the borrowed asset, the loan's collateral ratio falls below the liquidation threshold. Second, and more unique to restaking, a slashing event directly reduces the equity value of the restaker's position. Since the debt remains fixed, the leverage ratio spikes instantly. If a slash causes the collateral value to drop below the maintenance margin, a margin call and liquidation are triggered. This is a particularly pernicious risk because slashing can be a binary, non-linear event unrelated to market prices, making it harder to hedge and manage compared to traditional market-driven margin calls.

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