Restaking Explained: Earn Additional Yield on Staked ETH

EigenLayer restaking lets staked ETH secure additional protocols, earning extra yield. Here is what restaking is, how it works, and what the risks are.

Restaking, pioneered by EigenLayer, allows staked ETH (stETH, rETH) to be "restaked" — used to provide security to additional blockchain protocols beyond Ethereum itself. In return, restakers earn additional yields from these protocols on top of their base ETH staking rewards. It is the most significant new yield innovation in Ethereum DeFi since liquid staking.

How EigenLayer Restaking Works

Liquid Restaking Tokens (LRTs)

Restaking Risks

Restaking adds new risk vectors. Slashing can occur from AVS misbehaviour — if an AVS is penalised, restakers lose a portion of their stake. Smart contract risk is compounded — EigenLayer smart contracts plus AVS smart contracts plus liquid restaking protocol smart contracts all add risk. The higher yield compensates for these additional risks — size restaking positions accordingly.