Restaking

A Restaking is a mechanism that lets users reuse their staked cryptocurrency assets, such as ETH on Ethereum, to secure multiple blockchain networks or protocols simultaneously. Instead of unstaking assets from the original chain, restaking extends their security utility. Protocols like EigenLayer pioneered this by enabling shared security, where Ethereum's staked ETH protects other services.

Restaking works through specialized protocols. Users first stake ETH with validators on Ethereum, often receiving liquid staking tokens (LSTs) like stETH. They then deposit these LSTs into a restaking platform. The platform allocates the economic security to Actively Validated Services (AVSs), such as oracles or bridges, which require validation. Node operators run these AVSs and stake on behalf of users. Misbehavior triggers slashing, where portions of the restaked assets get burned, enforcing honesty across all secured services.

Restaking matters because it boosts capital efficiency. Stakers earn rewards from the original chain plus additional yields from AVSs, without locking up new capital. It solves the bootstrapping problem for new protocols by leveraging Ethereum's proven security model. This shared security model scales the ecosystem, reduces fragmentation, and lowers entry barriers for emerging networks.

Key types include native restaking, where users directly restake ETH, and liquid restaking, using LSTs for added liquidity (e.g., via protocols like Ether.fi). Risks involve compounded slashing, smart contract vulnerabilities, and correlated failures across services. EigenLayer remains the leading implementation.