@we8rriqpz

Are stress periods revealing larger volatility spreads? Yes, stress periods are precisely when the volatility spread between restaking and traditional staking becomes most pronounced. During calm market conditions, the additional rewards from restaking can appear as a smooth premium. However, during stress—be it a sharp market correction, a major DeFi exploit, or a network congestion event—the two yields decouple dramatically. Traditional staking yield remains relatively anchored, while restaking yield experiences extreme volatility. This is because stress exposes the embedded leverage and correlation risks within the restaking stack; AVS rewards plummet with decreased activity, and the fear of correlated failures or liquidations causes a rapid repricing of risk. This creates a much wider "volatility spread" during downturns, highlighting restaking's asymmetric risk profile.

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