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
- Deposit stETH or ETH into EigenLayer smart contracts
- Your restaked ETH now also secures "Actively Validated Services" (AVSs) — new protocols that rent Ethereum's security
- Each AVS pays restakers for the security provided — additional yield on top of ETH staking
- Risk: if an AVS is slashed (penalised for misbehaviour), restakers can lose a portion of their staked ETH
- Current restaked ETH: $20B+, multiple AVSs live including EigenDA (data availability)
Liquid Restaking Tokens (LRTs)
- Protocols like Ether.fi (eETH), Renzo (ezETH), and Puffer issue liquid restaking tokens
- Deposit ETH → receive LRT representing restaked ETH + all accumulated rewards
- Liquid: trade, use as collateral in Aave, or hold in Steyble wallet
- Current LRT yields: 5-7% base ETH staking + 1-3% additional restaking rewards = 6-10% total APY
- Steyble integrates leading LRT protocols — access from one interface with risk tier labelling
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.