Understanding MilkyWay's Liquid Staking and Restaking Protocol like I’m 5.

Understanding MilkyWay's Liquid Staking and Restaking Protocol like I’m 5.

Since its launch in December 2023, MilkyWay has gained traction, with over 156,000 milkTIA holders and more than 2.6 million $TIA tokens staked!

Integrated with Initia and Celestia ecosystems, users stake their INIT tokens with MilkyWay to receive a tokenized representation called milkINIT, which allows them to access liquidity for their staked assets, engage in trading, or use their tokens as collateral in DeFi dApps. The staked INIT compounds rewards automatically, and users can unstake their milkINIT to receive their tokens and accrued rewards.

like I’m 5 “Now imagine you have a special coin called INIT. You want to keep it safe and earn more coins, so you put it in a magical box called MilkyWay. In return, the box gives you a shiny coin called milkINIT that you can still use to trade or play with, while the original coin stays safe and grows more coins for you. That’s what liquid staking with MilkyWay does—your coins stay safe and earn rewards, but you can still use them.”

MilkyWay's restaking protocol enhances blockchain security by allowing token holders to deposit their assets—including native tokens or liquid staked tokens like USDC, TIA, and milkTIA—to secure Actively Validated Services (AVSs) across different chains. AVSs can include a wide range of services such as rollups, data availability layers, oracles, AI systems, and bridges. MilkyWay currently secures AVSs like DeFi protocols Blackwing and Tucana, Oracle service OJO, data service Nubit, AI system Supersight, and the Restaked Relayer bridge.

Restakers benefit from earning additional yield by securing multiple blockchains beyond the Initia network, leveraging MilkyWay's modular restaking system. The protocol supports multi-asset restaking and offers different models, including pooling assets, delegating to operators, or directly supporting specific AVSs. This provides users with flexibility and control over how their tokens are used.

like I’m 5 “Now, let’s say you want to help keep the whole playground safe, not just your special coin. You can do something called "restaking." It’s like telling the box to use your coin to protect different parts of the playground, like bridges or cool machines. For doing this extra job, you get even more rewards! And if you want to be extra clever, you can get a special milk coin called $MILK, which helps you make decisions about how the playground works and earns you a share of all the rewards everyone is getting.”

MilkyWay’s modular design also enables AVSs to customize their security by choosing the tokens and operators they prefer, and by setting custom delegation and slashing rules. At launch, users will be able to restake TIA, milkTIA, stTIA, and dtTIA, with plans to expand support to other tokens like INIT, liquid staked INIT, and ATOM.

MilkyWay’s restaking protocol is permissionless, allowing anyone to create Liquid Restaking Tokens (LRTs), which function similarly to liquid staked tokens, enabling users to earn rewards while keeping their assets liquid for other activities.

Milkyway’s native token, $MILK, will distribute a portion of the 10% protocol fee on staking rewards to holders and serve as the governance’s token. MilkyWay aims to be governed by a decentralized autonomous organization (DAO), with the community having control over protocol decisions.

MilkyWay Minita, an L2 solution built on the Initia ecosystem, will host the restaking portal, improving asset management within the network. MilkyWay provides a platform where users can stake their INIT tokens to earn rewards while still being able to use a tokenized version called milkINIT for other activities like trading or collateral. Allowing users to "restake" their assets to secure different projects across multiple blockchains, earning additional rewards.