Understanding Liquid Restaking

This new narrative taps into a $45B market.

In this article, we’ll cover how you can benefit from it before the masses.

  • From Staking to Liquid Staking

  • Entering The Restaking Era

  • Liquid Restaking & Opportunities

From Staking to Liquid Staking

In our Liquid staking article, we covered the basics of blockchain transaction (tx).

In a nutshell, to confirm tx on the blockchain, validators need to find an agreement method that will benefit all.

This is called the Consensus.

2 most popular ones are PoW (Proof-of-Work) & PoS (Proof-of-Stake).

We’ll focus on Ethereum PoS.

Ethereum Staking has few challenges :

❌ High entry barrier (32 ETH, roughly $50k rn)

❌ Assets locked become illiquid

❌Not easy to set up

Liquid Staking (LS) emerged as a solution to counter them.

LS protocols pool together ETH from multiple investors to become ETH validator.

They redistribute rewards with all investors & give them a Liquid Staking Token (LST) (e.g. stETH for Lido) representing their staking position & reusable in other DeFi platforms to generate additional yield .

Most population LS platforms at the time of writing this article:

Entering The Restaking Era

EigenLayer (EL) recently introduced a new narrative: Restaking

EL is a protocol using liquid staked eth to secure other DeFi protocols.

On EL, investors can deposit their LSTs to generate additional yield from them.

EL also offer native restaking.

But there’s a problem with restaking...

Restaked LSTs become illiquid.

Liquid Restaking & Opportunities

As history always repeats himself, Liquid Restaking (LR) is emerging as a solution to turn restaked LSTs into LRTs (Liquid Restaking Tokens).

LR protocols pool together LSTs of investors to restake them on EL.

They redistribute rewards with investors & give them a LRT representing their restaking position. This LRT is reusable in other DeFi platforms to generate additional yield.

Current hottest projects to follow in the LRT Ecosystem

(some protocols are still in testnet 👀)

We highly recommend you to do your own research and apply due diligence before using any of them.

As this narrative is relatively new, these protocols may not have the highest level of security.

Subscribe to Almaze Media Blog
Receive the latest updates directly to your inbox.
Mint this entry as an NFT to add it to your collection.
This entry has been permanently stored onchain and signed by its creator.