Liquid Restaking Token (LRT)
A Liquid Restaking Token (LRT) is a token that represents a position in a restaking protocol — like EigenLayer — where staked ETH (or LSTs) is re-pledged to secure additional services beyond Ethereum itself. Holding the LRT is equivalent to holding restaked exposure that remains liquid and transferable.
✦ Key Insight
LRTs were one of the largest DeFi narratives of the 2024-2025 cycle, attracting tens of billions in deposits. For traders, they offer enhanced yield over plain staking but stack new risks — operator slashing, smart-contract risk, and concentration risk in the restaking ecosystem.
✕ Common Misconceptions
Treating LRT yield as risk-free — slashing on any underlying AVS can cause loss.
Looping LRT-based collateral with leverage and being caught in a depeg.
Ignoring concentration of LRT operators in a few entities.
Detailed Explanation
How It Works: A user deposits ETH or an LST (like stETH) into an LRT protocol. The protocol delegates the underlying capital to operators who run Actively Validated Services (AVSs) on a restaking platform. The LRT accrues both base staking yield and AVS rewards, and can be used as collateral or LP elsewhere.
FAQs:
Can an LRT depeg? Yes — secondary market price can diverge from underlying value, especially during stress.
How are points related to LRTs? Many LRT protocols layered points programs on top to incentivize deposits.
In Practice
Dig Deeper
Liquid Staking Token (LST)
A Liquid Staking Token (LST) is a tokenized representation of staked assets — most commonly ETH — that remains transferable and usable across DeFi while the underlying stake continues to earn validator rewards. Examples include stETH, rETH, and similar tokens on other proof-of-stake chains.
Real Yield
Real yield is yield paid to token holders from actual protocol revenue (fees, interest, MEV captured) rather than from token emissions. The distinction matters because emissions are dilutive — they pay yield by printing more of the same token — while real yield is value brought in from users.
Ad
Get a $100K funded account
See current qualification terms and payout conditions.
Sponsored