{"id":37957,"date":"2024-01-15T18:00:00","date_gmt":"2024-01-15T16:00:00","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=37957"},"modified":"2025-08-29T23:51:58","modified_gmt":"2025-08-29T20:51:58","slug":"what-is-restaking-and-how-to-make-money-from-it","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/what-is-restaking-and-how-to-make-money-from-it\/","title":{"rendered":"What is restaking\u2014and how to make money from it?"},"content":{"rendered":"<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\"><strong>What is restaking?<\/strong><\/h2>\n<p>Restaking is the ability to reuse ETH from Ethereum\u2019s mainnet or from <a href=\"https:\/\/forklog.com\/en\/news\/what-is-liquid-staking\">liquid staking<\/a> pools as wrapped tokens on platforms that implement the EigenLayer protocol. The resulting assets can be deployed to help secure third\u2011party networks beyond the <a href=\"https:\/\/forklog.com\/en\/news\/what-is-the-ethereum-virtual-machine-evm\">EVM<\/a>.<\/p>\n<p>In April 2023 Ethereum\u2019s developers activated the Shapella upgrade, which included several changes at the network\u2019s consensus layer. The most important was enabling withdrawals of staked coins from the Beacon Chain deposit contract, unleashing liquidity onto the market. Once <a href=\"https:\/\/forklog.com\/en\/news\/proof-of-stake-how-it-works-and-why-it-is-so-popular\">Proof-of-Stake<\/a> had matured into a clearer and relatively safe model, staking began to provide passive income on a par with <a href=\"https:\/\/forklog.com\/en\/news\/what-is-the-proof-of-work-pow-algorithm\">PoW<\/a> mining. The Shapella hard fork also lifted a number of architectural constraints, laying the groundwork for new directions\u2014one of which is restaking.<\/p>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\"><strong>How does it differ from ordinary staking?<\/strong><\/h2>\n<p>In ordinary staking, a user locks tokens in a pool and earns yield for maintaining the network\u2019s operation and security. The coins are typically inaccessible to the depositor for the term specified in the smart contract\u2014much like a bank deposit.<\/p>\n<p>With restaking, tokens can be redeployed into other pools\u2014including after <a href=\"https:\/\/forklog.com\/en\/news\/what-is-liquid-staking\">liquid staking<\/a>. This enables additional income and participation in other DeFi projects.<\/p>\n<p>The concept resembles merged PoW mining, where, thanks to compatible algorithms, a miner can mine two or more cryptocurrencies at once without lowering aggregate hashrate. In PoS blockchains, this translates into the ability to redeploy staked coins.<\/p>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\"><strong>What is EigenLayer?<\/strong><br \/><\/h2>\n<p><a href=\"https:\/\/docs.eigenlayer.xyz\/overview\/key-terms\" target=\"_blank\" rel=\"noopener\" title=\"\">EigenLayer<\/a> is a protocol that introduces an intermediate layer in Ethereum\u2019s architecture. Its team has upended crypto\u2011economic security, allowing projects to:<\/p>\n<ul class=\"wp-block-list\">\n<li>tap the reliability of Ethereum\u2019s mainnet at the consensus level;<\/li>\n<li>choose how to support network liveness and resilience via restaking;<\/li>\n<li>attract investors by boosting user activity through reinvestment.<\/li>\n<\/ul>\n<\/div>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\"><strong>How does restaking work on EigenLayer?<\/strong><br \/><\/h2>\n<p>EigenLayer offers two ways to participate in restaking with different assets:<\/p>\n<ul class=\"wp-block-list\">\n<li><strong>Solo staking<\/strong>. Provide protocol\u2011verification services or delegate operations to other operators while remaining an Ethereum validator;<\/li>\n<li><strong>Trust model<\/strong>. Choose a trusted operator for authorisation. If the operator breaches the agreement, it is slashed.<\/li>\n<\/ul>\n<p>Since launch on mainnet, the team has gradually expanded pool capacity. If in the first phase it admitted <span data-descr=\"Liquid Staking Tokens\" class=\"old_tooltip\">LST<\/span> equivalent to 9,600 ETH, the second brought this to 45,000 ETH, then 100,000 ETH. In January 2024, in the most recent expansion, more than 500,000 ETH were added.<\/p>\n<p>Community members can select pools by voting with tokens\u2014one vote per 1 ETH. The smart contract pauses deposits once a pool hits its staked\u2011funds cap, resuming only after capacity is expanded. Each subsequent opening is announced in advance via its <a href=\"https:\/\/twitter.com\/eigenlayer\" target=\"_blank\" rel=\"noopener\" title=\"\">account<\/a> on X.<\/p>\n<p>Initially the protocol supported only three liquid restaking pools and only for users of Lido Finance (stETH), Rocket Pool (rETH) and Coinbase (cbETH). Following a vote in late 2023, a sufficient number of pools with current LSTs were added, including:<\/p>\n<ul class=\"wp-block-list\">\n<li>wBETH (Binance);<\/li>\n<li>osETH (Stakewise); <\/li>\n<li>swETH (Swell); <\/li>\n<li>AnkrETH (Ankr); <\/li>\n<li>EthX (Stader); <\/li>\n<li>oETH (Origin ETH).<\/li>\n<\/ul>\n<p>Based on <a href=\"https:\/\/defillama.com\/lsd\" target=\"_blank\" rel=\"noopener\" title=\"\">analytical data<\/a>, most activity takes place on liquid\u2011staking platforms\u2014over $32bn in <span data-descr=\"Total value locked\" class=\"old_tooltip\">TVL<\/span>, or nearly half of total TVL. According to <a href=\"https:\/\/defillama.com\/protocol\/eigenlayer\" target=\"_blank\" rel=\"noopener\" title=\"\">DefiLlama,<\/a> since June 2023 EigenLayer\u2019s TVL has grown from $13.3m to $1.7bn by early 2024.<\/p>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\"><strong>What is AVS in restaking?<\/strong><br \/><\/h2>\n<p>Thousands of <span data-descr=\"Decentralised applications\" class=\"old_tooltip\">dapps<\/span> have been built atop Ethereum, and the decentralised ecosystem is growing exponentially. Yet not all of them benefit from the security and trust of the main L1. The chief difficulty lies in writing bespoke cryptographic\u2011security code for each new dapp, and in the resources lost to maintain trust levels and the time needed to prepare AVS (Actively Validated Services).<\/p>\n<p>AVS are used in any system that applies a set of distributed semantics to protect networks. This includes sidechains, data\u2011availability (DA) layers, new virtual machines, keeper networks and <a href=\"https:\/\/forklog.com\/en\/news\/what-is-a-blockchain-oracle\">oracles<\/a>, <a href=\"https:\/\/forklog.com\/en\/news\/what-are-cross-chain-bridges\">cross-chain bridges<\/a> and various <a href=\"https:\/\/forklog.com\/en\/news\/what-is-a-layer%e2%80%912-solution-in-blockchain\">L2<\/a> solutions.<\/p>\n<p>On EigenLayer, restakers can earn additional yield and choose how to deploy their funds to support different AVS. The protocol team calls this approach <span data-descr=\"Free market governance\" class=\"old_tooltip\">free market governance<\/span>.<\/p>\n<p>One of the first AVS on EigenLayer was <a href=\"https:\/\/docs.eigenlayer.xyz\/eigenda-guides\/eigenda-overview\" target=\"_blank\" rel=\"noopener\" title=\"\">EigenDA<\/a>. The layer lets Ethereum make data more accessible without violating security requirements. EigenDA also provides <a href=\"https:\/\/forklog.com\/en\/news\/what-are-rollups-and-how-do-they-scale-ethereum\">rollups<\/a> with efficient, high\u2011throughput data transmission.<\/p>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\"><strong>What are data\u2011availability layers for?<\/strong><br \/><\/h2>\n<p>\u201cData availability\u201d denotes the assurance that block producers publish all transaction data for a block and make it accessible to all network participants. This means all nodes can download the data present in every block. A node automatically checks availability, confirming that a block\u2019s data were indeed published.<\/p>\n<p>Data\u2011availability layers come in two types: those residing directly on\u2011chain and those operating outside the blockchain.<\/p>\n<p>Broadly, EigenDA aims to show that Ethereum\u2019s stakers and validators can support critical infrastructure in addition to consensus, and that AVS and users can succeed by leveraging tokens on top of the network.<\/p>\n<p>At this stage EigenDA can reach throughput of up to 15 MB\/s, several times higher than Ethereum\u2019s current capacity. The team believes it could reach 1 GB\/s in future.<\/p>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\"><strong>What are the protocol\u2019s chief advantages?<\/strong><br \/><\/h2>\n<p>The EigenLayer protocol offers clear benefits:<\/p>\n<ul class=\"wp-block-list\">\n<li>the ability to raise economic security by adding new AVS that reuse Ethereum\u2019s existing validators;<\/li>\n<li>an increase in the financial value of all participating networks; <\/li>\n<li>the costs of enhancing Ethereum\u2019s security are balanced across multiple AVS;<\/li>\n<li>higher costs for potential attacks as the trust system becomes more global.<\/li>\n<\/ul>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\"><strong>What are EigenLayer\u2019s drawbacks?<\/strong><br \/><\/h2>\n<p>The protocol\u2019s drawbacks include:<\/p>\n<ul class=\"wp-block-list\">\n<li><strong>a single point of failure.<\/strong> If EigenLayer is attacked while a significant amount of ETH is staked through it, the main network could be put at risk;<\/li>\n<li><strong>centralisation risk.<\/strong> If the security of one application is provided by many stakers and they are slashed, this may have negative consequences for Ethereum.<\/li>\n<li><strong>yield risk.<\/strong> Protocols use Ethereum to secure themselves. However, EigenLayer stakers may chase the highest returns to maximise profits, potentially sparking a race for capital among protocols.<\/li>\n<li><strong>slashing\u2011policy risk.<\/strong> Protocols may change terms, lowering penalties to attract more capital and thereby undermining their own security.<\/li>\n<\/ul>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>How the EigenLayer protocol works, what it is for, and its advantages and vulnerabilities.<\/p>\n","protected":false},"author":1,"featured_media":37958,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"1","cryptorium_level":"2","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[2113],"tags":[1262,46,77,1263],"class_list":["post-37957","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptorium","tag-eigenlayer","tag-ethereum","tag-proof-of-stake","tag-restaking"],"aioseo_notices":[],"amp_enabled":true,"views":"106","promo_type":"1","layout_type":"1","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/37957","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/comments?post=37957"}],"version-history":[{"count":1,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/37957\/revisions"}],"predecessor-version":[{"id":37959,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/37957\/revisions\/37959"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media\/37958"}],"wp:attachment":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media?parent=37957"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/categories?post=37957"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/tags?post=37957"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}