Restaking

9.1 Using the same security twice

"Staked ETH secures Ethereum," said Hash. "What if the same staked ETH could also secure other services at the same time, and earn extra rewards for it?"

"That sounds like getting paid twice for the same thing," said Mint.

"It's getting paid twice for taking on more risk," said Hash. "That's the idea behind restaking. It's one of the more complex areas of DeFi, and it's worth understanding the layers carefully."

9.2 The problem restaking addresses

Many crypto services need their own security: bridges (Module 3, Chapter 10), oracles (Module 3, Chapter 12), data availability networks (Module 3, Chapter 9), and others. Traditionally, each had to build its own validator set and its own token to attract staking. That's expensive, and new services start with little security.

Restaking lets stakers commit their already-staked ETH, or liquid staking tokens, to secure additional services. Those services pay extra rewards. In return, stakers accept additional slashing conditions: if they misbehave while securing those services, part of their stake can be destroyed.

Restaking protocols emerged on Ethereum in 2023 and 2024 and attracted large deposits quickly, though the actual slashing that enforces these conditions only went live on the largest restaking protocol in April 2025, and even then it is opt-in and rolled out gradually.

9.3 How it works

Layer	What happens	Reward	Risk
1. Staking	ETH secures Ethereum	Ethereum staking rewards	Ethereum slashing
2. Restaking	The same stake is committed to additional services	Extra rewards from those services	Additional slashing conditions
3. Liquid restaking	A protocol issues a token representing restaked ETH	Can be used in DeFi	Smart contract and depeg risk on another layer

Services that use restaked security are sometimes called actively validated services (AVSs). Operators run the software for these services, and stakers delegate to operators, choosing which services to support.

9.4 Liquid restaking tokens

Just as liquid staking produces LSTs (Chapter 8), liquid restaking produces liquid restaking tokens (LRTs). Users deposit ETH or LSTs into a liquid restaking protocol, which restakes them and issues an LRT.

Mint traced the full stack:

Step	Token held	Risks added
Hold ETH	ETH	ETH price risk
Liquid stake	LST	Staking protocol contracts, operators, slashing, LST depeg
Restake via liquid restaking	LRT	Restaking contracts, additional slashing, operator choices, LRT depeg
Deposit LRT in a lending protocol	Lending position	Lending contracts, oracle, liquidation
Borrow ETH and loop (Chapter 11)	Leveraged position	Amplified everything above

"Five layers," said Mint. "Each with its own way to fail."

"And each failure can cascade into the layers built on it," said Hash.

9.5 Where the extra yield comes from

Source	Reality
Fees paid by services	Real, but depends on whether services generate meaningful revenue
Service tokens	Often paid in new tokens, which may be inflationary or illiquid (Module 5, Chapter 3)
Points and expected airdrops	Common in early phases; speculative and may never convert to value

During the early growth of restaking, much of the advertised extra yield came from points: non-transferable credits that users hoped would turn into airdrops (Chapter 10). When airdrops arrived, results were mixed. Some participants did well; others found the rewards smaller than the risks they'd carried.

9.6 Restaking risks

Risk	Explanation
Additional slashing	Mistakes or attacks on any secured service can slash restaked ETH
Correlated slashing	One operator failure can hit stakers across several services at once
Smart contract layers	More contracts, more potential bugs
LRT depeg and liquidity	LRTs can trade at discounts, especially if withdrawals take long
Withdrawal delays	Exiting restaking adds waiting periods on top of Ethereum's exit queue
Systemic concerns	If a large share of staked ETH is restaked, problems in restaking could affect Ethereum's security itself
Opaque risk	It can be hard to know exactly which services and slashing conditions your stake supports

Node summarised the concern. "So restaking takes the asset that secures Ethereum and uses it as collateral for other things. If those other things fail badly enough, it could hurt Ethereum."

"That's the debate," said Hash. "Supporters see shared security as efficient and powerful. Critics worry about piling risk onto Ethereum's foundation. Both sides make serious arguments."

9.7 Evaluating a restaking opportunity

1. Which services does your stake secure, and what are their slashing conditions?
2. Which operators are used, and what's their track record?
3. Is the extra yield paid in fees, service tokens, or points?
4. How long does it take to withdraw, end to end?
5. How has the LRT traded against ETH during market stress?
6. How many smart contract layers are involved, and have they been audited?
7. Is the extra yield worth the additional risk compared with simple staking?

9.8 Try it yourself

Find a restaking dashboard and note the total ETH restaked, the number of services using restaked security, and the largest operators. Then pick one liquid restaking token: what does it hold, which services does it support, what's its withdrawal process, and how does its DEX price compare with its underlying value?

Key takeaways from this chapter

1. Restaking commits already-staked ETH to secure additional services, for extra rewards and extra slashing risk.
2. Liquid restaking tokens represent restaked positions and can be used in DeFi, adding another layer.
3. Each layer, from staking to restaking to lending to looping, adds its own risks and dependencies.
4. Extra yield may come from fees, service tokens, or speculative points.
5. Risks include additional and correlated slashing, more contracts, LRT depegs, withdrawal delays, and systemic concerns.
6. Evaluate restaking on services, operators, yield sources, withdrawals, depeg history, and contract layers.