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RestakingAVS

Restaking reuses already staked assets to help secure additional protocols in return for extra rewards. It adds layers of risk, because the same stake can be slashed under several sets of rules. Liquid restaking tokens represent such positions.

Restaking lets staked ETH secure more services on top of Ethereum in exchange for extra rewards. It stacks yield, but it also stacks risk: the same stake can be slashed for more than one job. Liquid restaking tokens add another layer on top of that.

Category
Cryptocurrency and Blockchain
Reading time
4 min
Also called
ETH restaking, Liquid restaking, Shared security
Updated

Restaking in plain words

Restaking means using ETH that is already staked to help secure other services as well.1

In exchange, restakers can earn extra rewards on top of normal staking rewards.1

Liquid staking tokens or governance tokens can be staked again through special protocols to back so-called actively validated services (AVS).2

How restaking works

  1. Stake ETH

    Start with staked ETH or a liquid staking token.

  2. Deposit into a restaking protocol

    Opt in to secure extra services, called AVSs.

  3. Get a receipt token

    With liquid restaking, you deposit a staking token such as stETH and receive a liquid restaking token (LRT) in return.1

  4. Earn extra rewards

    Additional rewards come on top of regular ETH staking rewards.1

  5. Face more slashing rules

    Know the penalty: if you or your operator go offline or misbehave, part or all of the stake can be slashed.1

  6. Wait to exit

    Plan for the unbonding period — withdrawals aren't instant.1

Worked examples

Example 1 — Stacked yield

1.0 ETH a year

A hypothetical holder restakes 20 ETH. Base staking pays 3% and restaking adds 2%.

Example 1 — Stacked yield — calculation
Base reward20 × 3% = 0.6 ETH
Extra reward20 × 2% = 0.4 ETH
Total0.6 + 0.4 = 1.0 ETH

The extra yield comes on top of ordinary staking rewards.1

Example 2 — A slashing event

2 ETH lost

The same hypothetical 20 ETH is slashed 10% by one service.

Example 2 — A slashing event — calculation
Loss20 × 10% = 2 ETH
Left20 − 2 = 18 ETH

Slashing wiped out the stake, erasing two years of extra rewards.1

Example 3 — Leverage loop

1.7× exposure

A hypothetical user deposits an LRT worth 10 ETH, borrows 7 ETH against it and restakes again.

Example 3 — Leverage loop — calculation
Exposure10 + 7 = 17 ETH
Leverage17 ÷ 10 = 1.7×

Using restaking tokens as loan collateral adds leverage, which magnifies losses if things go wrong.2

Staking vs restaking

AspectStakingRestaking
What it securesEthereum onlyEthereum plus extra services
Reward sourcesEthereum rewardsEthereum plus service rewards
Slashing exposureEthereum rulesSeveral sets of rules
ExitEthereum withdrawal queueAdded unbonding period

Where restaking shows up

  • Yield seeking

    Adds return on staked ETH, with more Exposure.

  • Collateral

    LRTs are used in DeFi Leverage loops.

  • Risk review

    Protocol and operator choices add Counterparty Risk.

  • Exit planning

    Unbonding hurts Liquidity in a sell-off.

Advantages and disadvantages

Advantages

  • Extra yield on staked ETH.
  • Helps new services borrow Ethereum's security.
  • Liquid tokens keep some flexibility.
  • Lets stakers choose which services to back.

Disadvantages

  • More ways to be slashed.
  • Unbonding delays exits.
  • LRTs can trade below their backing.
  • Leverage loops magnify losses.

Going deeper

Read as far as you need. Each level builds on the one before it.

Same stake, more jobs

Beginner

One deposit ends up securing several systems at once.1

Linked failures

Intermediate

If a restaker is slashed while backing several services, all of them lose some security at once.1

Supervisor concerns

Advanced

EU supervisors say that with restaking the risks previously described are intensified, pointing to layered smart-contract, liquidity and leverage risk.2

Common mistakes

  1. Seeing only the yield

    Extra reward comes with extra slashing.

  2. Assuming instant exits

    Unbonding can take time.

  3. Treating an LRT as ETH

    It can trade at a discount.

  4. Looping with leverage

    Small price gaps can trigger Liquidation.

Check your understanding

Test yourself before moving on. Each answer comes with an explanation.

Q110 ETH restaked earns 3% base plus 1.5% extra. What is the yearly total?
Q2What is an AVS in restaking?

Key points to remember

  1. Restaking reuses staked ETH to secure other services.
  2. It adds rewards on top of staking.
  3. It adds more slashing risk.
  4. LRTs make restaked ETH tradable.
  5. Unbonding and leverage add liquidity risk.

Frequently asked questions

Is restaking the same as staking?

No. It reuses staked ETH for extra services and extra risk.

What is a liquid restaking token?

A token that represents restaked ETH and can be traded or used as collateral.

Can restaking lose my ETH?

Yes, through slashing, smart-contract bugs or LRT price drops.

Further learning

Sources

This article is written in our own words. The sources below support the specific facts, rules and figures marked with a number in the text. Links open the original publisher’s page.

  1. ethereum.org. Restaking (opens in a new tab) Checked .
  2. European Supervisory Authorities (EBA and ESMA). Joint Report on recent developments in crypto-assets (Article 142 MiCAR, 2025) (opens in a new tab) Checked .

Educational content, not financial advice. Examples use hypothetical prices and simplified costs; actual fees, margin rules and regulations vary by broker, market and country. We are not affiliated with any publisher linked above. Last reviewed . Report an error or request a source credit.