How Does Pell Network Work?
Pell Network extends EigenLayer's Ethereum restaking model to Bitcoin, allowing holders of BTC-native assets like WBTC, BTCB, and stBTC to restake and earn yield by providing cryptoeconomic security to external services (AVSs). Users deposit BTC-native assets, receive pSTK liquid receipt tokens, and earn yield from AVS fees. The protocol operates across multiple chains including BNB Chain and Merlin. About $200M in TVL and backed by several crypto-native VCs.
TVL
$309,000
Sector
Restaking
Risk Grade
C+
Value Grade
C
Core Mechanisms
Restaking/BTC
NovelPell BTC restaking: restake BTC-native assets (WBTC, BTCB, stBTC) to provide cryptoeconomic security to external services
Pell extends EigenLayer's Ethereum restaking model to Bitcoin, enabling BTC-native assets to provide cryptoeconomic security for AVSs. Supports WBTC, BTCB (BNB Chain BTC), stBTC, and other BTC derivatives as restakeable collateral.
Restaking/AVS
Actively Validated Services: external protocols purchasing cryptoeconomic security from Pell restakers via slashing conditions
AVSs on Pell include oracle networks, bridge validators, and data availability layers that need cryptoeconomic security guarantees. Restakers opt-in to specific AVSs, accepting slashing conditions in exchange for yield. AVS ecosystem is early-stage.
Cross-Chain/Security
NovelMulti-chain restaking: unified security framework allowing BTC restaked on BNB Chain to provide security for services on Merlin, Base, and other chains
Pell operates across multiple chains simultaneously, enabling BTC collateral on one chain to secure services on another. More complex than single-chain restaking but enables broader AVS addressable market.
Liquid Staking/Restaking
pSTK tokens: liquid receipt tokens for Pell-restaked BTC assets, tradeable while restaking is active
When users restake BTC-native assets on Pell, they receive pSTK liquid receipt tokens. pSTK can be traded or used in DeFi while the underlying BTC restaking is active, maintaining liquidity for restakers.
Governance/Token
PELL token: governance over AVS whitelisting, slashing parameters, and fee distribution
PELL governance token controls which AVSs can access Pell security, slashing conditions, and protocol fee allocation. Early-stage distribution with significant insider allocations typical of VC-backed restaking protocols.
How the Pieces Interact
A malicious or buggy AVS could trigger slashing conditions unfairly, permanently destroying restaker BTC principal with no appeal mechanism
Cross-chain slashing execution requires bridge reliability — a bridge failure during a slashing event could prevent the slash from executing, undermining AVS security guarantees
If Pell becomes the primary security provider for a critical bridge or oracle, a Pell-level exploit could cascade into failures across all dependent services simultaneously
Without sufficient AVS demand, Pell relies on PELL token emissions for restaking yield — when emissions taper, yields collapse and TVL exits
What Could Go Wrong
- BTC restaking is doubly experimental: combines Bitcoin's limited scripting with Ethereum's restaking cryptoeconomic model — neither component is fully battle-tested for this use case
- Multi-chain restaking across Merlin Chain, BNB Chain, and others multiplies smart contract attack surfaces while creating complex cross-chain slashing dependencies
- Slashing risk is real: PELL validators providing security services can be slashed for misbehavior, resulting in BTC principal loss for restakers
- AVS (Actively Validated Services) ecosystem on Pell is nascent — without meaningful services needing security, restaking yields are artificially high and unsustainable
- PELL token has significant unlocking schedule that may create sell pressure against a protocol with limited proven revenue
Buggy AVS Triggers Mass Slashing of Restaker Collateral
ModerateTrigger: A whitelisted AVS with a governance or smart contract bug triggers invalid slashing conditions against Pell restakers, destroying a significant portion of the restaked BTC pool
- 1.Buggy AVS contract triggers slashing for a large validator set erroneously — Significant BTC collateral destroyed; pSTK token value falls sharply
- 2.Pell governance attempts emergency veto but timelock delay prevents immediate halt — Additional slashing continues during governance response period
- 3.Mass pSTK redemption requests overwhelm liquidity; pSTK trades at deep discount — Protocol paused; remaining restakers cannot exit; trust in BTC restaking collapses
Risk Profile at a Glance
Overall: C+ (37/100)
Lower score = safer