What Is Restaking in Cryptocurrency? A Clear Guide to Earning More Yield on Staked ETH

What Is Restaking in Cryptocurrency? A Clear Guide to Earning More Yield on Staked ETH

Restaking Yield Calculator

How Much Could You Earn?

Calculate projected yields from restaking your Ethereum

ETH
Regular Staking
3.5% - 4.5%
Liquid Restaking
7.0% - 9.5%
Native Restaking
8.5% - 12.0%
Projected Earnings

Important Risk Notice: Restaking exposes you to additional slashing risks from multiple AVS protocols.
A single 10-minute outage could result in 0.5% loss for some AVS protocols.

Imagine you’re already staking your Ethereum to earn rewards. Now imagine you could use that same staked ETH to help secure other blockchain services - and earn even more rewards - without locking up more money. That’s restaking. It’s not just a new buzzword. It’s a real shift in how blockchain security works, and it’s already moving billions of dollars in crypto.

What Exactly Is Restaking?

Restaking lets you reuse your staked cryptocurrency - like ETH - to secure more than one blockchain protocol at the same time. You don’t need to sell or withdraw your original stake. Instead, you let it do double (or triple, or more) duty.

This idea was made practical by EigenLayer a decentralized protocol on Ethereum that allows validators to restake their ETH to secure other services called Actively Validated Services (AVSs). Before EigenLayer launched in March 2024, new blockchain projects had to build their own security from scratch - expensive, slow, and risky. Now, they can tap into Ethereum’s massive security network by paying validators in extra rewards.

Think of it like renting out your home. You still live there (your ETH stays staked on Ethereum), but you’re also letting someone use your spare room (the extra security) - and you get paid for it.

How Does Restaking Work?

There are two main ways to restake: native and liquid.

Native restaking is for people who run their own Ethereum validator nodes. You need 32 ETH, a reliable computer (8+ CPU cores, 16+ GB RAM), and technical know-how. Once you’re staking ETH on Ethereum, you connect your validator to EigenLayer’s smart contracts. Then you choose which AVSs you want to help secure - like a decentralized oracle network or a privacy layer. Each AVS sets its own rules. If you mess up, you can get slashed - meaning you lose part of your stake - not just by Ethereum, but by the AVS too.

Liquid restaking is simpler. You stake your ETH with a service like Ether.Fi or Renzo and get back a token like eETH or ezETH. These aren’t just receipts - they’re tokens that earn rewards from both Ethereum and the restaking protocol. You then deposit those tokens into a restaking platform. The platform handles the complexity. You don’t need to run a node. You just hold the token and earn more yield.

Either way, your ETH is still locked. But now it’s working harder.

Why Would You Want to Restake?

The biggest reason: more rewards. Standard Ethereum staking pays about 3.5% to 4.5% annually. Restaking can push that to 8% to 12%, depending on the AVSs you choose. That’s nearly triple the income - with no extra ETH needed.

It also helps the whole ecosystem. New protocols like decentralized rollups or privacy tools used to struggle to attract enough security. Now, they can offer yield to attract restakers. That makes the whole crypto space more resilient.

And for institutional players - people with large ETH holdings - restaking is a way to boost returns without taking on new risk. As of October 2024, over $20 billion in ETH was being restaked. That’s 15% of all ETH staked on Ethereum.

A smiling liquid token being passed between robots and a shadowy SEC figure in a chaotic financial scene.

What Are the Risks?

More reward = more risk. That’s the trade-off.

When you restake, you’re not just exposed to Ethereum’s slashing rules. Each AVS you support adds its own. One AVS might slash you 0.5% for a 10-minute downtime. Another might slash you 100% if your node signs conflicting data. You have to track them all.

There’s also the risk of cascading failures. If a popular AVS gets hacked, and many restakers are tied to it, the losses could ripple out. Some experts worry this could create a single point of failure across the whole DeFi space.

Liquid restaking adds another layer: if your LRT (like eETH) gets used as collateral in lending protocols, and the price drops, you could get liquidated - even if your restaking rewards are still good.

One user on Reddit lost $1,200 after a minor node glitch triggered a 0.5% slash from an AVS. That’s not rare. And most users don’t fully understand the terms of the AVS they’re supporting.

Restaking vs. Regular Staking vs. Liquid Staking

Comparison: Staking, Liquid Staking, and Restaking
Feature Regular Staking Liquid Staking Restaking
Capital Required 32 ETH (minimum) Any amount Any amount (if using LSTs)
Technical Skill High Low to medium Medium to high
APY Range 3.5% - 4.5% 3.5% - 5% 8% - 12%
Liquidity No Yes (LSTs) Yes (LRTs)
Slashing Risk Only Ethereum Only Ethereum Ethereum + all AVSs
Primary Use Case Secure Ethereum Get liquidity while staking Earn more yield + secure other protocols
An Ethereum coin on trial before a blockchain judge, surrounded by AVSs in dunce caps and a giant contract scroll.

Who’s Doing It?

Most restakers aren’t everyday users. Data shows that 68% of restaked ETH comes from wallets holding 1,000 ETH or more. These are institutions, DAOs, and serious retail investors.

Only about 35% of users run their own validators. The rest use operators - third-party services that manage the technical side for a fee (usually 5-10%). That’s how most people avoid the headaches of syncing multiple nodes and monitoring slashing conditions.

EigenLayer dominates the market with 89% of all restaked value. Other players like EtherFi, Renzo, and Puffer are trying to catch up, mostly by offering better UX or higher yields on specific AVSs.

What’s Next for Restaking?

The next big step is better risk tools. EigenLayer plans to launch a reputation system for AVSs in late 2024 - think of it like a Yelp for blockchain services. You’ll see ratings, uptime stats, and slashing history before you commit your ETH.

There’s also talk of capping how much security any single AVS can draw from restaking. That’s a direct response to fears that one bad actor could bring down the whole system.

Experts predict restaking could hit $100 billion in value by 2026. That’s 25-30% of all staked ETH. Liquid restaking tokens (LRTs) are expected to make up 40% of that total.

But the biggest wildcard? Regulation. The U.S. SEC has already warned that some restaking setups might count as unregistered securities. If that happens, platforms could be forced to shut down or restrict access to U.S. users.

Should You Try Restaking?

If you’re new to crypto - or even to staking - skip it for now. The complexity and risk aren’t worth it.

If you’re already staking ETH and understand how slashing works, then restaking could be a smart way to boost returns. Start small. Use a liquid restaking platform like Ether.Fi. Don’t run your own node until you’ve spent weeks learning.

And always - always - read the terms of every AVS you connect to. One line in a contract could mean losing half your stake over a 10-second outage.

Restaking isn’t magic. It’s just capital efficiency - and like all efficiency, it comes with trade-offs. The question isn’t whether it’s powerful. It’s whether you’re ready to handle the risks.

14 Comments
  1. Sammy Tam

    Restaking is wild when you think about it - your ETH becomes this multi-tool for blockchain security. I’ve been using Ether.Fi for liquid restaking and my ezETH is quietly stacking up yield like it’s on autopilot. No need to babysit a node, no panic when your internet glitches. Just hold, earn, and forget. The APY jump from 4% to 9%? That’s not magic, that’s math. And honestly, if you’re not doing this yet and you’re already staking, you’re leaving money on the table.

  2. Madhavi Shyam

    LRTs are just rehypothecated collateral wrapped in DeFi glitter. You think you’re earning yield but you’re just increasing systemic leverage. The AVS slashing vectors are not documented, not audited, and not understood by 95% of users. This is a house of cards built on Ethereum’s reputation.

  3. Cheyenne Cotter

    I’ve spent the last six months reading every EigenLayer EIP, watching the AVS uptime dashboards, and comparing slashing histories across 12 different protocols. Most people don’t realize that the 12% APY isn’t guaranteed - it’s a variable rate tied to token emissions and node performance. And if you’re using a third-party operator, you’re trusting their uptime, their patching schedule, and their ability to monitor 3-5 different slashing conditions simultaneously. I’ve seen validators get slashed 0.8% on a privacy AVS because they didn’t update their gossip protocol. It wasn’t their fault - the AVS changed the rules without a hard fork. No one warned users. And now we’re all just guessing which AVS is safe. I’m not saying don’t restake - I’m saying do your homework like you’re auditing a smart contract.

  4. Jack Daniels

    They’re coming for your ETH next. You think this is just yield? Wait until the SEC classifies LRTs as securities. Then they’ll freeze your wallet, audit your transactions, and demand KYC on your restaking positions. They already have the papers. This isn’t finance. It’s a trap.

  5. Mark Cook

    restaking is just wall street with blockchain tattoos 😅

  6. Jonny Cena

    If you’re new to this, start with 0.5 ETH on Ether.Fi. Don’t go all in. Don’t run a node yet. Watch how your ezETH behaves over a month. Check the AVS ratings. Read the docs. You don’t need to be a dev to earn more - you just need to be careful. I’ve helped five friends get started this way. No one lost money. Everyone’s happy. Small steps.

  7. Timothy Slazyk

    The real innovation isn’t restaking - it’s the unbundling of security. Ethereum is becoming the base layer for consensus, not just settlement. AVSs are like apps that rent security instead of building it. That’s a paradigm shift. But the risk isn’t just technical - it’s philosophical. If one AVS fails and triggers cascading slashes across 20% of restaked ETH, are we still decentralized? Or are we just a centralized system with more moving parts? The answer isn’t in the code. It’s in the incentives. And right now, the incentives are misaligned. Most users care about APY. Few care about the integrity of the AVS. That’s not a bug. It’s a feature of human nature. And that’s why this will end badly - unless we build better tools for risk transparency. EigenLayer’s Yelp idea? It’s a start. But it needs to be mandatory, not optional.

  8. Terrance Alan

    People act like restaking is some kind of free lunch but they forget that every extra dollar of yield comes with extra risk you didn’t sign up for. You think you’re just earning more but you’re actually becoming a volunteer security guard for random startups who can’t afford their own validators. And when one of them gets hacked and your ETH gets slashed for something you didn’t even understand - you’ll be the one crying on Reddit while the AVS team quietly deletes their Discord. This isn’t innovation. It’s exploitation dressed up as finance.

  9. Bradley Cassidy

    so i just started restaking with renzo and honestly it’s kinda crazy how easy it is like i just clicked a button and now my eth is securing some privacy thing and i’m getting 10% apy?? idk what that means but my wallet is happy 😅 also i think the ui is kinda glitchy i lost my transaction id once but it showed up later??

  10. Sally Valdez

    Let me guess - you’re all celebrating how ‘smart’ you are for earning 10% on your ETH while the rest of us are stuck with inflation and rent hikes. You think this is freedom? This is just another way for rich tech bros to gamble with other people’s money and call it ‘decentralized finance.’ Meanwhile, your grandma can’t afford insulin but you’re optimizing your yield on a blockchain you don’t even understand. This isn’t progress. It’s a cult. And you’re the acolytes.

  11. Craig Nikonov

    Restaking is a Fed backdoor. EigenLayer is owned by the same people who run Chainlink. They’re using your ETH to build a surveillance layer for global financial control. The AVSs aren’t random - they’re all linked to KYC providers and data oracles. One day your restaked ETH will be used to flag you as ‘high risk’ for buying groceries. You think you’re earning yield? You’re being profiled.

  12. Donna Goines

    I’ve been tracking this since March. The 20B in restaked ETH? Most of it is from whales who don’t care about slashing - they’re hedging with derivatives. The small users? They’re the cannon fodder. When the first big AVS collapse happens, the big players will exit, the LRTs will depeg, and the retail crowd will be left holding the bag. I told you this was a Ponzi. Now you’re just mad because you didn’t listen.

  13. Samantha West

    It is imperative to underscore that the structural integrity of the restaking mechanism is predicated upon the assumption of immutable validator accountability. One must interrogate the ontological underpinnings of slashing conditions across heterogeneous AVSs - are they truly interoperable, or merely syntactically compatible? The current paradigm, while economically expedient, risks the erosion of cryptographic sovereignty. One must ask: who audits the auditors? And when the centralization of trust migrates from Ethereum to EigenLayer, have we not merely substituted one sovereign for another? The answer, I fear, is affirmative.

  14. Greg Knapp

    my friend lost 1200 dollars on a 10 minute downtime and now he's crying and i'm just sitting here wondering why anyone does this

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