I've been thinking a lot about how the ETH restaking narrative has attracted so much money, yet it seems like almost nobody really understands how it works. I recently came across some news that made me even more concerned. Karak, a new restaking project that’s been getting a ton of attention, was revealed to be the second reincarnation of Risk Harbor—a protocol accused of running off with millions that were supposed to insure Terra’s failed UST stablecoin.
I was shocked to learn that despite Karak's troubling past, it managed to close a $48 million funding round and achieve a $1 billion valuation, backed by some of the biggest names in crypto. I can’t help but draw parallels to the Terra-Luna crash, where promises of high returns led to a catastrophic collapse.
I’m struggling to understand how so much trust and money can be funneled into a project that has such a questionable history. The team behind Karak insists that the accusations are just FUD, but I can’t shake the feeling that we might be heading toward another disaster. I’ve seen this story play out before—complex financial products offering high rewards, only to end in disaster.
I wonder if others feel the same unease. As more and more people pour their assets into these restaking protocols, I can’t help but think we might be watching the early signs of another crash in the making.