Crypto glossary
Restaking
Restaking is reusing assets already staked on a blockchain, usually ETH, to also secure other services in return for extra rewards and extra slashing risk.
In normal staking, locked ETH secures the Ethereum network. Restaking lets the same stake, or a liquid staking token that represents it, be pledged a second time to other systems such as oracles, bridges or data availability layers. Those services pay additional rewards, and they can penalise restakers whose operators misbehave.
EigenLayer introduced the model on Ethereum, and other protocols have copied it on several networks. Liquid restaking protocols then issued liquid restaking tokens, or LRTs, which represent a restaked position and can be traded or used as collateral in DeFi. Much of the early growth was driven by points programs promising future airdrops.
Restaking stacks risks on top of each other: the slashing conditions of every service, smart contract bugs in each layer and the chance that an LRT trades below its underlying value. Critics also warn that reusing the same collateral many times can spread a failure across several protocols.
Example
A user deposits stETH in a restaking protocol and keeps earning Ethereum staking rewards, while also receiving extra rewards from the services that the restaked ETH helps secure.
Related terms
Latest articles on Restaking
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