Restaking is the practice of using already-staked assets to secure additional blockchain protocols simultaneously, earning extra yield on top of base staking rewards. Instead of your staked ETH sitting idle once it is securing Ethereum, restaking puts that same capital to work securing other networks, oracle systems, data availability layers, and similar infrastructure. EigenLayer is the primary protocol that made this possible. The trade-off is real: each additional protocol you secure adds another set of slashing conditions. Higher potential yield comes with a more complex and compounding risk profile that requires careful evaluation before committing capital.
What Is Restaking?
To understand restaking you need to start with a question: once ETH is staked and securing Ethereum, what happens to that economic security? The answer before restaking existed was nothing. The staked ETH sat as collateral backing Ethereum's consensus, earning its base staking yield, and that was the end of its utility.
Restaking changes this. It allows validators to extend the use of their staked ETH, or their liquid staking tokens representing staked ETH, to simultaneously provide economic security to other protocols that need it. Those protocols pay for that security in additional yield. The validator earns on two fronts from the same underlying capital.
The key insight behind the concept is that Ethereum has accumulated an enormous amount of staked capital, over $50 billion at the time of writing. Many new protocols need some form of economic security to function properly but building their own validator sets from scratch is slow and expensive. Restaking offers them a shortcut: access to Ethereum's existing security pool in exchange for paying yield to the validators who opt in.
This creates a market for security. Protocols that need it can buy it. Validators who have it can sell it. EigenLayer built the infrastructure that makes this market possible.
How Restaking Works: The Yield Stack
The mechanics build in layers. Understanding each layer is important before committing capital because each one adds yield and each one adds risk simultaneously.
Most investors who participate in restaking operate at Layer 2 or Layer 3. Layer 4 is for those with a clear understanding of the compounding risks involved and the technical ability to monitor positions across multiple protocols simultaneously.
What Are Actively Validated Services?
An Actively Validated Service, or AVS, is any protocol that uses EigenLayer's restaking infrastructure to access economic security. The range of use cases is broad. Oracles that need to guarantee the accuracy of price feeds are one category. Data availability layers that need validators to attest to the availability of transaction data are another. Bridges between blockchains, decentralised sequencers for rollups, and various other infrastructure components have all been built as AVSs or are in development as such.
Each AVS defines its own rules for what constitutes proper validator behaviour and what constitutes a slashable offence. When you opt in to secure an AVS, you are agreeing to those rules. If your validator or the operator you delegated to violates them, slashing can occur independent of whether any Ethereum rule was broken.
EigenLayer: How The Dominant Protocol Works
EigenLayer is the protocol that introduced restaking to Ethereum and remains the largest by total value locked. Understanding how it is structured helps clarify the trust and risk relationships involved. For a focused look at EigenLayer specifically, including its history and the broader case for what it is trying to build, the EigenLayer deep dive covers that ground directly.
The Three Participants
EigenLayer's system has three distinct participant types, each with a different role.
- Stakers deposit ETH or LSTs into EigenLayer and delegate their restaked position to an operator. They choose which operators to trust but do not run infrastructure themselves.
- Operators are the entities that actually run the validation software for AVSs. They accept delegations from stakers, register with AVSs, and perform the actual validation work. They take a commission from the rewards earned.
- AVSs are the protocols that use EigenLayer to access economic security. They pay operators and stakers for securing their services.
Most retail participants interact with EigenLayer as stakers, delegating their restaked position to an operator and earning a share of the rewards that operator generates across the AVSs they participate in.
Native Restaking vs LST Restaking
There are two ways to restake via EigenLayer. Native restaking requires running your own Ethereum validator and pointing your validator's withdrawal credentials to EigenLayer's smart contracts. This gives you more control and avoids the smart contract risk of an LST, but it requires the 32 ETH minimum to run a validator and the technical capability to manage one.
LST restaking involves depositing a liquid staking token such as stETH, rETH, or cbETH directly into EigenLayer. This is accessible to anyone regardless of how much ETH they hold and requires no validator infrastructure. The trade-off is that you carry the smart contract risk of both the LST protocol and EigenLayer simultaneously.
The live application of restaking data, how EigenLayer TVL and AVS adoption are fitting into the current DeFi cycle, and what the evidence says about positioning from here will be in the weekly member update.
See membership optionsThe Risks That Make Restaking Different From Regular Staking
Restaking introduces a set of risk dimensions that do not exist in regular staking and that are easy to underestimate when looking only at the yield figures. These need to be understood before committing capital.
Compounding Slashing Risk
In regular Ethereum staking, slashing can only occur if your validator violates Ethereum's consensus rules, primarily double signing. The conditions are well understood and the risk of accidental slashing for a properly configured validator is very low.
In restaking, you add the slashing conditions of every AVS you opt in to secure. Each AVS defines its own rules. Some may be well-designed with narrow, clearly defined slashing conditions. Others may be newer, less tested, or have conditions that are harder to guarantee compliance with in all edge cases. A slashing event triggered by any AVS you have committed to can affect the same pool of staked ETH that is also securing Ethereum.
Operator Risk
Most retail restakers do not run their own infrastructure. They delegate to operators who do. This creates a trust dependency. If the operator you delegate to is poorly configured, inexperienced with a specific AVS's requirements, or acts maliciously, you bear the consequences through your delegated stake. Evaluating operators before delegating is not optional. Track record, which AVSs they participate in, their commission rates, and their technical transparency all matter.
Smart Contract Risk
EigenLayer is a complex system of interacting smart contracts. The contracts have been audited but, as with all DeFi protocols, audit history is not a guarantee. A vulnerability in EigenLayer's core contracts or in an AVS's contracts could affect deposited funds. The more AVSs that are live and the more interactions between contracts, the larger the potential attack surface becomes over time.
AVS Quality Risk
Not all AVSs are created equal. Some will be well-designed, properly audited, and backed by credible teams. Others will be newer, less tested, and operating with less established track records. The yield offered by an AVS is partly a reflection of the risk it carries. Higher yield from a newer, unproven AVS is not the same risk profile as lower yield from a well-established one. Evaluating AVS quality before opting in is part of the work restaking requires.
Liquid Restaking Tokens: What They Are And What They Add
Liquid restaking tokens, or LRTs, are tokens issued by protocols that handle restaking on your behalf and give you a liquid, tradeable token representing your restaked position. The major liquid restaking protocols include Ether.fi, which issues weETH, Renzo, which issues ezETH, and Kelp DAO, which issues rsETH.
The appeal is composability. Rather than having your capital locked in EigenLayer earning restaking rewards with no other utility, an LRT can be used in DeFi protocols as collateral, supplied to lending markets, or deployed in yield aggregators. You earn restaking rewards on the underlying position and potentially additional yield from whatever DeFi application you deploy the LRT into.
| Protocol | Token Issued | Key Characteristic |
|---|---|---|
| Ether.fi | weETH | Largest LRT by TVL. Non-custodial design where users retain withdrawal keys. eETH is the base token; weETH is the wrapped, rebasing version for DeFi use. |
| Renzo | ezETH | Abstracts AVS selection and operator delegation behind a single deposit. Simpler user experience but less transparency into the underlying AVS exposure. |
| Kelp DAO | rsETH | Accepts multiple LSTs as deposits. Offers a basket approach where different input assets are restaked across AVSs managed by Kelp's operators. |
The Additional Risk Layer LRTs Introduce
LRTs add a smart contract layer on top of EigenLayer. You are now trusting the LRT protocol's contracts in addition to EigenLayer's contracts and the AVS contracts beneath them. A failure at any level of this stack can affect the value of your LRT position. The liquid token can also trade at a discount to its underlying value during periods of market stress, as happened briefly with ezETH in April 2024 when it temporarily depegged on secondary markets during a period of heavy selling.
Is Restaking Right For You?
Restaking is not appropriate for every investor who holds ETH. The honest framework for deciding is straightforward.
If you hold ETH as a long-term position and are comfortable with the base staking risk, restaking via a liquid restaking protocol adds yield with a manageable additional risk layer provided you choose an established protocol with a clear track record. The incremental yield is real and the incremental risk, while present, is bounded if you use a major LRT rather than directly opting into obscure AVSs.
If you are considering stacking LRTs into DeFi lending protocols or yield aggregators on top of restaking, the risk profile becomes significantly more complex. You are combining restaking risk, smart contract risk across multiple protocols, liquidation risk if you use LRTs as collateral, and liquidity risk if the LRT depegs. That combination is appropriate for investors who actively monitor positions and have a clear exit plan, not for those treating it as a set-and-forget yield product.
The base principle from the staking guide applies here with more force: the yield figure is not the most important number. The most important number is what happens to your underlying ETH if something goes wrong at any layer of the stack you are committed to.
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