What is Restaking?
Restaking is an innovation that allows staked ETH to secure additional protocols and services beyond the Ethereum network itself. By "restaking" your already-staked assets, you extend Ethereum's cryptoeconomic security to new applications while earning additional rewards on top of your base staking yield.
The concept was pioneered by EigenLayer, which launched in 2023 and quickly became one of the largest DeFi protocols by TVL, attracting over $15 billion in restaked assets. Restaking represents a new paradigm in blockchain security. Instead of every new protocol bootstrapping its own validator set, they can borrow Ethereum's battle-tested security infrastructure.
How Restaking Works
The restaking mechanism builds on top of existing staking infrastructure:
Traditional Staking: You stake ETH to secure the Ethereum network. Validators validate Ethereum blocks and earn ~4% APY. Restaking: You opt-in to have your staked ETH also secure additional protocols called Actively Validated Services (AVS). In return, you earn rewards from both Ethereum AND the AVS protocols you're securing.The key insight is that your staked ETH can provide security to multiple systems simultaneously. A validator's stake is collateral. If they misbehave, it gets slashed. Restaking extends this collateral to cover obligations to multiple protocols.
EigenLayer Architecture
Restakers: Users who deposit ETH, LSTs, or other assets into EigenLayer Operators: Professional entities that run validator software for AVS protocols AVS (Actively Validated Services): Protocols that use restaked security (oracles, bridges, data availability layers) The Flow:- Restakers deposit assets into EigenLayer
- Restakers delegate to Operators
- Operators run AVS software on behalf of restakers
- AVS protocols pay rewards to operators and restakers
- If operators misbehave, restakers' deposits can be slashed
Ways to Restake
Native RestakingRun your own Ethereum validator and point your withdrawal credentials to EigenLayer's contracts. This is the most capital-efficient but requires 32 ETH and technical expertise.
Liquid Restaking (Most Popular)Deposit LSTs (stETH, rETH) into EigenLayer and receive liquid restaking tokens (LRTs):
- eETH from EtherFi
- ezETH from Renzo
- pufETH from Puffer
- rsETH from Kelp
LRTs let you restake while maintaining liquidity. Use them across DeFi just like regular LSTs.
LST RestakingDeposit liquid staking tokens directly into EigenLayer without receiving an LRT. Your tokens remain in EigenLayer earning restaking rewards.
Restaking Yield Stack
Restaking creates multiple layers of yield:
| Layer | Source | Typical Yield |
|---|---|---|
| . . . - | . . . . | . . . . . . . - |
| 1. Base Staking | Ethereum network | 3-4% APY |
| 2. Restaking | AVS rewards | Variable |
| 3. LRT Protocol | Protocol incentives | Variable |
| 4. Points | Future airdrops | TBD |
The total yield depends on which AVS are active and how rewards are distributed. During the points phase, actual AVS rewards are limited, but point accumulation may lead to valuable token distributions.
Major Restaking Protocols
EigenLayer: The original restaking protocol. Deposit ETH or LSTs directly. EtherFi (eETH): Largest liquid restaking protocol by TVL. Offers native restaking with a liquid wrapper. Renzo (ezETH): Fast-growing LRT protocol with cross-chain deposits. Puffer (pufETH): Focuses on native restaking with anti-slashing technology. Kelp (rsETH): Multi-asset LRT that accepts various LSTs.Understanding the Risks
Slashing Risk: Restaking adds new slashing conditions. If an operator misbehaves on any AVS they're running, your stake can be slashed. This is additive. You're exposed to Ethereum slashing PLUS AVS slashing. Smart Contract Risk: Restaking involves multiple smart contracts (EigenLayer + LRT protocol + AVS). Each layer adds potential vulnerability. Operator Risk: You're trusting operators to run AVS software correctly. Poor operator choice increases slashing exposure. Complexity Risk: The restaking stack is complex. Multiple protocols, multiple rewards, multiple risks. Easier to make mistakes. Liquidity Risk: Some LRTs have limited DEX liquidity. In stress scenarios, you might not be able to exit at fair value. Regulatory Uncertainty: Restaking is new and may face regulatory scrutiny as it grows.Getting Started with Restaking
Option 1: Liquid Restaking (Recommended for most users)- Acquire ETH in your wallet
- Visit etherfi.com, renzoprotocol.com, or another LRT provider
- Connect wallet and deposit ETH
- Receive LRT tokens (eETH, ezETH, etc.)
- Hold for restaking rewards or use in DeFi
- Acquire LSTs (stETH, rETH)
- Visit app.eigenlayer.xyz
- Deposit LSTs into restaking strategies
- Select operators to delegate to
- Earn restaking rewards (no LRT liquidity)
Restaking Strategies
Simple Hold: Deposit into an LRT protocol, hold, earn staking + restaking yield + points. LRT DeFi: Use LRTs as collateral in lending protocols or provide liquidity in LRT/ETH pools. Points Maximization: Deposit into protocols with active points programs for potential airdrop exposure. Diversified Operators: If directly restaking, spread delegation across multiple operators to reduce single-operator risk.Track your restaking positions and points across protocols with Fensory. Monitor rewards, compare LRT yields, and optimize your restaking strategy.
Frequently Asked Questions
Is restaking risky?Yes, restaking adds slashing risk on top of normal staking. Your deposits can be slashed if operators misbehave on any AVS they're running. Only restake what you can afford to lose.
What are EigenLayer points?Points track your restaking contribution over time. They're expected to convert to EIGEN tokens (EigenLayer's native token) in future distributions. Accumulation rate depends on deposit size and duration.
What's the difference between LRTs and LSTs?LSTs (stETH, rETH) represent staked ETH earning Ethereum staking rewards. LRTs (eETH, ezETH) represent restaked ETH earning staking + restaking + protocol rewards.
Should I use an LRT or deposit directly to EigenLayer?LRTs offer liquidity and additional incentives. Direct EigenLayer deposits have lower smart contract risk but no liquidity. For most users, established LRTs are more practical.
How do I choose operators?Look for operators with: strong track record, multiple AVS experience, transparent slashing policies, and established reputation. LRT protocols handle operator selection for you.
Risk Disclaimer
Restaking is an emerging technology with additional risks beyond traditional staking. Slashing can result in loss of principal. Smart contract risk exists across multiple protocol layers. Points and future rewards are not guaranteed. Never restake more than you can afford to lose.
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