Technical Definition

Restaking

Restaking is the practice of pledging already-staked assets (e.g., staked ETH or Liquid Staking Tokens) as security for additional protocols or services, in exchange for extra rewards. The same capital secures multiple things at once.

By Crypto University Editorial
Liquid Restaking TokenLiquid Staking TokenReal Yield

✦ Key Insight

Restaking — pioneered by EigenLayer on Ethereum and Babylon on Bitcoin — created a new yield primitive and a new category of "shared security" services. For traders, it produced billions in new on-chain economic activity and reshaped how validators and operators are compensated.

✕ Common Misconceptions

Treating restaking yield as additive without modeling additional slashing risk.

Stacking LSTs and LRTs into deep leverage without considering correlated risk.

Concentrating in a single operator that may be slashed across multiple AVSs at once.

Detailed Explanation

How It Works: A staker delegates their stake to an operator who runs both the base chain's validator software and one or more Actively Validated Services (AVSs) — bridges, oracles, data availability layers. Misbehavior on any AVS can result in slashing of the underlying stake; honest behavior earns additional rewards from each AVS.

FAQs:

  • Is restaking riskier than staking? Yes — additional services bring additional slashing conditions.

Can I restake on Bitcoin? Yes — Babylon and similar protocols allow native BTC to back other chains' security.

In Practice

“A user restakes 32 ETH worth of stETH through a restaking protocol. Their stake now secures Ethereum and three AVSs, each paying a small additional reward stream.”

Dig Deeper

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.