Restaking & EigenLayer: The Complete AVS Economy Guide
EigenLayer has created the largest new yield opportunity in Ethereum history. Restaking lets you earn additional yield on staked ETH—but with additional risks. Master the ecosystem before committing capital.
- Restaking earns additional yield by securing other networks (AVS) with your staked ETH.
- LRTs (eETH, ezETH, rsETH) make restaking liquid but add smart contract and depeg risks.
- Thrive tracks your restaking positions and alerts on AVS changes and LRT health.
Restaking Yield Comparison
Compare yields and risk profiles across major restaking protocols:
EigenLayer
Native restaking protocol. Points convert to EIGEN tokens.
Yield Breakdown
Restaking Risks
Restaking adds smart contract risk on top of staking risk. AVS slashing conditions vary. Points value is speculative until token launch. Newer protocols have less battle-tested code.
Understanding EigenLayer
EigenLayer is Ethereum's most significant innovation since The Merge. It extends Ethereum's security to other protocols, creating a marketplace where stakers can earn additional yield by securing "Actively Validated Services" (AVS).
The Core Innovation
Before EigenLayer, every new protocol needed to bootstrap its own validator set and security. This was expensive, slow, and created fragmented security across the ecosystem.
EigenLayer solves this by letting protocols "rent" security from Ethereum's existing $100B+ staked ETH. Stakers opt-in to secure additional services and earn fees for doing so.
How Restaking Works
- Deposit: You deposit staked ETH (native or LST like stETH) into EigenLayer
- Delegate: Your deposit is delegated to operators who run AVS software
- Secure: Your stake secures AVS protocols (oracles, bridges, data availability, etc.)
- Earn: You receive ETH staking rewards + AVS fees + protocol incentives
- Risk: Your stake can be slashed for AVS misbehavior (on top of regular slashing)
The AVS Ecosystem
AVS are protocols that use EigenLayer for security. Current and announced AVS include:
- EigenDA: Data availability layer for rollups (EigenLayer's own AVS)
- Hyperlane: Cross-chain messaging and bridge security
- Espresso: Shared sequencer for rollups
- Omni: Cross-rollup interoperability
- AltLayer: Restaked rollups
- Lagrange: ZK coprocessors
Each AVS pays fees to restakers, creating multiple yield streams on the same staked capital.
Key Insight: EigenLayer is essentially creating "Ethereum security as a service." Any protocol that needs validators can now tap into Ethereum's existing security instead of bootstrapping their own—but restakers take on the risk of each AVS they secure.
Liquid Restaking Tokens (LRTs)
Native EigenLayer restaking locks your ETH. Liquid Restaking Tokens solve this by giving you a liquid token representing your restaked position.
How LRTs Work
- You deposit ETH (or stETH, etc.) into an LRT protocol
- Protocol deposits into EigenLayer on your behalf
- You receive an LRT token (eETH, ezETH, rsETH, etc.)
- LRT accrues value from staking + restaking rewards
- You can use LRT in DeFi (lending, LP, collateral) while earning
Major LRT Protocols
ether.fi (eETH)
TVL: ~$6.8B (largest LRT)
Token: eETH (rebasing), weETH (non-rebasing wrapper)
Features: Most liquidity, widest DeFi integrations, decentralized validator set
Rewards: ETH staking + EigenLayer + ether.fi points → ETHFI token
Best for: Users prioritizing liquidity and DeFi composability
Renzo (ezETH)
TVL: ~$3.2B
Token: ezETH
Features: Higher points multipliers, aggressive growth strategy
Rewards: ETH staking + EigenLayer + Renzo ezPoints → REZ token
Best for: Point farmers seeking higher multipliers
Kelp DAO (rsETH)
TVL: ~$1.5B
Token: rsETH
Features: Multi-layer reward stacking, newer protocol
Rewards: ETH staking + EigenLayer + Kelp Miles
Best for: Users comfortable with newer protocols for potential higher rewards
Puffer Finance (pufETH)
TVL: ~$1.2B
Token: pufETH
Features: Focus on secure validator technology, anti-slashing mechanisms
Rewards: ETH staking + EigenLayer + Puffer points
Best for: Users prioritizing slashing protection
| Protocol | TVL | Points Multi | DeFi Integrations | Risk Level |
|---|---|---|---|---|
| ether.fi (eETH) | $6.8B | 1.5x | Excellent | Medium |
| Renzo (ezETH) | $3.2B | 2x | Good | Medium-High |
| Kelp (rsETH) | $1.5B | 1.8x | Moderate | Higher |
| Puffer (pufETH) | $1.2B | 1.5x | Moderate | Medium |
Understanding Restaking Yields
The Yield Stack
Restaking yields come from multiple sources:
- Base ETH staking: ~3.5% APY from Ethereum PoS rewards
- AVS fees: Variable based on AVS demand and your allocation
- Protocol incentives: Points programs converting to tokens
- DeFi yield: If using LRTs in lending/LP
Realistic Return Expectations
Conservative estimate (post-points era): 4-6% APY
This assumes AVS fees mature but points programs end. Base staking plus modest AVS premium.
Current estimate (with points): 8-15%+ effective APY
Points speculation adds significant value, but this is not sustainable long-term.
Point value is speculative. Until tokens launch and trade, point values are guesses based on:
- Comparable token launches (ETHFI, REZ, EIGEN)
- Protocol TVL and user metrics
- Team/investor expectations
- Market conditions at launch
Alpha: The best restaking returns come early—before TVL dilutes rewards and before points programs end. If you believe in the EigenLayer thesis, earlier entry captures more upside. But early also means more risk.
Risk Assessment Framework
Layer 1: Ethereum Staking Risk
- Validator slashing (rare, minor risk with good operators)
- Ethereum protocol risk (extremely low)
- Correlation risk (all staked ETH exposed to same events)
Layer 2: EigenLayer Protocol Risk
- Smart contract bugs in EigenLayer core contracts
- Operator misbehavior or negligence
- Governance attacks or protocol changes
- Economic attacks exploiting restaking mechanics
Layer 3: AVS-Specific Risk
- Each AVS has unique slashing conditions
- AVS software bugs can cause slashing
- AVS economic design may be flawed
- More AVS = more attack surface
Layer 4: LRT Protocol Risk
- LRT smart contract vulnerabilities
- Depeg risk (LRT trades below ETH value)
- Liquidity crisis during market stress
- Oracle manipulation for LRT prices
Risk Mitigation Strategies
- Diversify LRTs: Don't put all restaked ETH in one protocol
- Monitor depeg: Set alerts for LRT price deviations
- Understand AVS: Know which AVS you're securing and their slashing conditions
- Size appropriately: Only restake what you can afford to lose
- Maintain liquidity: Keep some ETH un-restaked for flexibility
Warning: Restaking is NOT the same as staking. Each layer adds risk. A bug in any layer (Ethereum, EigenLayer, AVS, or LRT) can result in loss. The yield premium exists because you're taking more risk.
Restaking Strategies
Strategy 1: Conservative LRT Stacking
Focus on the largest, most liquid LRT with widest DeFi integrations.
- Use ether.fi eETH/weETH for maximum liquidity
- Deploy in established DeFi (Aave, Pendle) for additional yield
- Accept moderate points returns for lower risk
- Target: Base staking + 2-4% additional
Strategy 2: Aggressive Point Farming
Maximize point accumulation across multiple LRTs and protocols.
- Spread across high-multiplier LRTs (Renzo, Kelp)
- Use LRTs in point-boosted DeFi protocols
- Loop positions for leverage (risky)
- Accept higher protocol risk for point upside
- Target: Maximum points, speculative value
Strategy 3: Native Restaking (Advanced)
Skip LRTs entirely, restake directly through EigenLayer.
- Run your own validator or use trusted operator
- No LRT smart contract risk
- No depeg risk
- But: illiquid, requires technical knowledge
- Target: Maximum control, minimum trust assumptions
Strategy 4: Pendle Yield Trading
Use Pendle to trade restaking yields and points.
- Buy PT (principal token) for fixed yield
- Buy YT (yield token) to speculate on points value
- Provide LP for stable yield
- Requires understanding Pendle mechanics
- Target: Yield speculation/hedging
LRT DeFi Integrations
Lending Markets
Major LRTs are accepted as collateral on Aave, Morpho, and other lending protocols. This enables:
- Borrowing against LRT positions
- Leverage looping (deposit LRT → borrow ETH → buy more LRT)
- Earning lending fees on top of restaking yield
Caution: Leverage looping amplifies ALL risks. A 5% LRT depeg can liquidate a 3x leveraged position. Only loop if you deeply understand the risks.
Liquidity Pools
Provide liquidity for LRT/ETH pairs on Curve, Balancer, or Uniswap:
- Earn swap fees + LP incentives
- Help maintain LRT peg
- Impermanent loss risk if LRT depegs
Yield Tokenization (Pendle)
Pendle lets you split LRTs into principal and yield components:
- PT-eETH: Fixed yield, redeemable for eETH at maturity
- YT-eETH: Pure exposure to points/yield speculation
- Enables sophisticated yield strategies
Points Boosting Programs
Many protocols offer bonus points for using LRTs in their ecosystem:
- Depositing on specific chains (Linea, Scroll, Blast)
- Using in partner protocols
- Holding for minimum durations
Track these programs carefully—they change frequently and can significantly boost returns.
The Future of Restaking
AVS Maturation
As more AVS launch and generate real fees, restaking yields will shift from point speculation to sustainable fee income. This is healthier long-term but may mean lower yields than current point-boosted returns.
Competition
Symbiotic and other restaking protocols are emerging as EigenLayer competitors. Competition may benefit restakers through better terms and incentives.
Regulatory Uncertainty
Restaking blurs lines between staking and other financial activities. Regulatory treatment is unclear. Consider jurisdiction-specific risks.
Slashing Events
No major AVS slashing has occurred yet. When it does, it will test the system and potentially cause LRT volatility. Be prepared.
Frequently Asked Questions
What is restaking?
Restaking allows you to use already-staked ETH (or liquid staking tokens like stETH) to secure additional networks called Actively Validated Services (AVS). You earn ETH staking rewards plus AVS rewards, but accept additional slashing risk from the AVS validation duties.
What is EigenLayer?
EigenLayer is the protocol that enables restaking on Ethereum. It lets stakers opt-in to secure additional services (AVS) with their staked ETH. Think of it as renting out your staked ETH's security to other protocols while still earning base staking rewards.
What are Liquid Restaking Tokens (LRTs)?
LRTs like eETH (ether.fi), ezETH (Renzo), and rsETH (Kelp) are tokens that represent restaked positions. They let you restake while keeping your capital liquid for use in other DeFi protocols. You get restaking yield plus LRT protocol rewards (often points/tokens).
What is an AVS in EigenLayer?
Actively Validated Services (AVS) are protocols that use EigenLayer's restaked ETH for security. Examples include EigenDA (data availability), oracle networks, bridges, and rollup sequencers. Each AVS pays fees to restakers for security services.
What are the risks of restaking?
Key risks: (1) Additional slashing from AVS conditions, (2) Smart contract risk from EigenLayer + LRT protocols, (3) Depeg risk if LRT trades below ETH value, (4) AVS-specific risks, (5) Liquidity risk during market stress. Restaking compounds risk on top of regular staking.
How do EigenLayer points work?
EigenLayer awarded points to early restakers before their token launch. Points were convertible to EIGEN tokens. Similar programs exist for LRT protocols (ether.fi points, Renzo ezPoints, Kelp Miles). Point values are speculative until token launches/conversions.
Which LRT protocol is best?
Depends on your priorities. ether.fi (eETH) has highest TVL and most liquidity. Renzo offers higher point multipliers. Kelp stacks multiple reward layers. Compare: security (audit status, TVL), liquidity (can you exit easily?), rewards (points programs), and DeFi integrations.
Can I lose my staked ETH through restaking?
Yes. AVS slashing conditions can result in loss of staked capital. If an AVS validator misbehaves or fails duties, restakers can be slashed. This is ON TOP OF regular Ethereum staking slashing. Only restake what you can afford to lose and choose AVS carefully.