What if an EigenLayer bug cascades slashing across restaked ether?
Correlated EigenLayer slashing wipes restaked ETH and forces emergency unbonding, so the cleanest read is ETH-down (-5%) as the restaking yield premium reprices to risk and DeFi de-grosses. Closest analogue is the stETH-discount unwind of mid-2022, when a staking-derivative dislocation forced cascading exits. Novel angle: restaking layers leverage on the same ETH collateral, so a slashing event is a previously-absent correlated-loss vector that could amplify any future ETH drawdown.
Every number ships with its receipt — the odds, the range, the precedents, and a public grade at Reality Check. The statistical machinery that produces it is proprietary.
The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (electric blue) over time vs the market's (Polymarket, amber), from the past toward the 0–6 months horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. Loading the probability audit trail…
What it would mean
If this plays out, it is a mixed shock. A buggy AVS triggers correlated slashing across EigenLayer operators, wiping restaked ETH and forcing emergency unbonding across DeFi. The trigger decomposes into signed root‑shocks — Crypto confidence ▼ · Crypto liquidity ▼ — which propagate through our causal graph to the markets below.