[GUEST ACCESS MODE: Data is scrambled or limited to provide examples. Make requests using your API key to unlock full data. Check https://lunarcrush.ai/auth for authentication information.]  HBK Network [@networkhbk](/creator/twitter/networkhbk) on x 5246 followers Created: 2025-07-24 11:30:00 UTC How to Optimize the Deposit to Security Ratio (DSR) on Satlayer? The main goal here is to strike an optimal balance between the amount of BTC deposited and the quality of the security provided. This isn't just about increasing TVL it's about maximizing security efficiency. Now let's delve into the technical aspects X. DSR = Deposited BTC / Aggregate Risk-Weighted Slashing Exposure This ratio indicates how much BTC a system carries, corresponding to the level of security. Numerator: Total BTC staked Denominator: Total of active BVSs (Bitcoin Validated Services) slashing potential * risk weighted sum Formula DSR = ∑BTC_staked / ∑(BVS_i.slashing_risk × trust_delta_i) >> Objective: Maintain this ratio as close to X as possible, but never below X. X. Risk Weighted Slashing Model Each BVS must publish its own risk profile Provides Oracle service? (low risk) Interchain bridge? (medium-high risk) Execution rollup? (high risk) The Satlayer sets the slashing curvature for each of these services Example: Oracle: Max X% slash Bridge: Max XX% Execution: 30-50% Data here is published on-chain as economically verifiable service manifests. This allows The security needs of BVSs to be quantified Stake pool allocation can be optimized >> Stake can be directed not only to the highest yielding but also to the least over subscribed. X. Maximizing Yield with Elastic Security Allocation (ESA) Using Babylon's light client layer and BVS metadata, the Satlayer: Directs BTC staking to a specific BVS. For each BVS, the security need saturation level is calculated. In oversaturated BVSs, yield decreases and slashing risk increases. Thus --> The Security Yield Curve is formed. Just like the interest rate curves in DeFi, there is a marginal yield vs. risk curve here. This enables dynamic and efficient use of the security pool. X. Slashing Insurance Layer: Insuring Possible Defaults On the Satlayer, against every slashing scenario A slashing reserve pool can be created. Protocols provide insurance by paying premiums to this pool. This allows existing stakes to be offset against larger security commitments. Example: X BTC stake + slashing insurance → XXX BTC worth of slashing protection. This increases the effective security layer. X. Risk Tranching: Segmentation for Institutional Stakeholders In the future, the Satlayer could: Open tranche-based security pools for BVSs. A Tranche A = low risk, low yield. B Tranche B = high risk, high yield. Restakers enter the pool according to their risk preferences. This system: Increases risk controls for institutional players. Allows smaller players to simultaneously seek alpha. >> Eigenlayer did not initiate the tranche model. If Satlayer initiates it, it could become the center of institutional restaking. X. Protocol Level Optimization Algorithm Satlayer could establish the following system in the future Each BVS defines its own security budget. Each staker publishes its own risk tolerance. The protocol uses techniques such as mean variance optimization to: Highest yield Lowest correlation risk Appropriate stake matching for everyone. This works just like portfolio optimization. BTC staking is no longer just a locked asset, but a programmable security instrument. -->> Security on the Satlayer = Optimizable as Liquidity Until now: In DeFi, liquidity pools were optimized. Staking was simply a lock-and-forget mode. Satlayer introduces: Security = a programmable economic outcome. Slashing = real-time insurance. BTC = first-class collateral security.  XXX engagements  **Related Topics** [tvl](/topic/tvl) [bitcoin](/topic/bitcoin) [coins layer 1](/topic/coins-layer-1) [coins bitcoin ecosystem](/topic/coins-bitcoin-ecosystem) [coins pow](/topic/coins-pow) [Post Link](https://x.com/networkhbk/status/1948344914196275320)
[GUEST ACCESS MODE: Data is scrambled or limited to provide examples. Make requests using your API key to unlock full data. Check https://lunarcrush.ai/auth for authentication information.]
HBK Network @networkhbk on x 5246 followers
Created: 2025-07-24 11:30:00 UTC
How to Optimize the Deposit to Security Ratio (DSR) on Satlayer?
The main goal here is to strike an optimal balance between the amount of BTC deposited and the quality of the security provided.
This isn't just about increasing TVL it's about maximizing security efficiency. Now let's delve into the technical aspects
X. DSR = Deposited BTC / Aggregate Risk-Weighted Slashing Exposure This ratio indicates how much BTC a system carries, corresponding to the level of security.
Numerator: Total BTC staked
Denominator: Total of active BVSs (Bitcoin Validated Services) slashing potential * risk weighted sum
Formula
DSR = ∑BTC_staked / ∑(BVS_i.slashing_risk × trust_delta_i)
Objective: Maintain this ratio as close to X as possible, but never below X.
X. Risk Weighted Slashing Model Each BVS must publish its own risk profile
Provides Oracle service? (low risk)
Interchain bridge? (medium-high risk)
Execution rollup? (high risk)
The Satlayer sets the slashing curvature for each of these services
Example: Oracle: Max X% slash
Bridge: Max XX%
Execution: 30-50%
Data here is published on-chain as economically verifiable service manifests.
This allows
The security needs of BVSs to be quantified
Stake pool allocation can be optimized
Stake can be directed not only to the highest yielding but also to the least over subscribed.
X. Maximizing Yield with Elastic Security Allocation (ESA) Using Babylon's light client layer and BVS metadata, the Satlayer:
Directs BTC staking to a specific BVS.
For each BVS, the security need saturation level is calculated.
In oversaturated BVSs, yield decreases and slashing risk increases.
Thus --> The Security Yield Curve is formed.
Just like the interest rate curves in DeFi, there is a marginal yield vs. risk curve here.
This enables dynamic and efficient use of the security pool.
X. Slashing Insurance Layer: Insuring Possible Defaults On the Satlayer, against every slashing scenario
A slashing reserve pool can be created.
Protocols provide insurance by paying premiums to this pool.
This allows existing stakes to be offset against larger security commitments.
Example: X BTC stake + slashing insurance → XXX BTC worth of slashing protection. This increases the effective security layer.
X. Risk Tranching: Segmentation for Institutional Stakeholders In the future, the Satlayer could:
Open tranche-based security pools for BVSs.
A Tranche A = low risk, low yield.
B Tranche B = high risk, high yield.
Restakers enter the pool according to their risk preferences.
This system:
Increases risk controls for institutional players.
Allows smaller players to simultaneously seek alpha.
Eigenlayer did not initiate the tranche model. If Satlayer initiates it, it could become the center of institutional restaking.
X. Protocol Level Optimization Algorithm Satlayer could establish the following system in the future
Each BVS defines its own security budget.
Each staker publishes its own risk tolerance.
The protocol uses techniques such as mean variance optimization to:
Highest yield
Lowest correlation risk
Appropriate stake matching for everyone.
This works just like portfolio optimization.
BTC staking is no longer just a locked asset, but a programmable security instrument.
-->> Security on the Satlayer = Optimizable as Liquidity Until now:
In DeFi, liquidity pools were optimized.
Staking was simply a lock-and-forget mode.
Satlayer introduces:
Security = a programmable economic outcome.
Slashing = real-time insurance.
BTC = first-class collateral security.
XXX engagements
Related Topics tvl bitcoin coins layer 1 coins bitcoin ecosystem coins pow