Restaking
Also called: liquid restaking · LRT
Definition
Restaking is reusing already staked ETH, or a liquid staking token, to also secure additional services, earning extra rewards in exchange for extra slashing and smart contract risk.
How restaking works
EigenLayer popularised restaking on Ethereum. Stakers opt in to let their staked ETH secure other systems, such as data availability layers, oracles or bridges, often called actively validated services. If the operator they delegate to breaks the rules of those services, part of the stake can be slashed.
Liquid restaking protocols, such as those issuing tokens like ezETH, rsETH or weETH, wrap this process: you deposit ETH or an LST and receive a liquid restaking token that you can trade or use in DeFi.
Each layer adds a risk. You carry Ethereum staking risk, the restaking protocol's contract risk, the slashing rules of every service secured, and the risk that the liquid restaking token trades below its underlying value. Extra yield is payment for those risks.
Example
Imagine you hold 4 stETH earning an illustrative 3 percent staking reward. You restake them through a liquid restaking protocol and receive a token that adds an estimated 1.5 percent in extra rewards. On 4 ETH worth of stake, that is about 0.12 ETH a year from staking plus 0.06 ETH from restaking. If an operator is slashed 2 percent for misbehaviour, you could lose about 0.08 ETH, wiping out most of the extra rewards.
Common mistakes
- Treating restaking yield as risk-free because the underlying asset is ETH.
- Ignoring that liquid restaking tokens can be harder to sell quickly than ETH or stETH.
- Looping restaking tokens with borrowing without understanding liquidation thresholds.
Learn and practise
FAQ
What is the difference between staking and restaking?
Staking secures the Ethereum network itself. Restaking extends the same stake to secure additional services, adding new rewards and new slashing risks.
Is EigenLayer the only restaking protocol?
No. EigenLayer is the best known on Ethereum, but other restaking protocols exist on Ethereum and other networks.