Restaking

Restaking means reusing staked assets, usually staked ETH or liquid staking tokens, to secure additional networks or services beyond the base blockchain in exchange for extra rewards. EigenLayer, which launched on Ethereum in 2023, popularised the idea.

Services that need security, such as oracles, data availability layers or bridges, can "rent" economic security from restakers instead of building their own validator set and token from scratch. Restakers opt in, run or delegate to operators that perform the work, and agree that their stake can be slashed if those operators misbehave.

Restaking stacks risks on top of each other. Your ETH can be exposed to the rules and bugs of several systems at once, so one failure could cause losses. Liquid restaking tokens, issued by protocols such as ether.fi and Renzo, add another layer of smart-contract and depeg risk. Much of the early demand was driven by points programmes and expected airdrops rather than stable yields.