Re-staking, we've talked about it many times before. Today, I want to share insights on three key points:

1. The fundamental role of re-staking in the blockchain ecosystem.

2. The disappearance of ETH re-staking’s early-bird bonus.

3. Introducing new strategies for ETH re-staking.

Let’s dive into each of these one by one.

1. Re-staking’s Fundamental Role in Providing Long-Term Stable Returns

In traditional finance, interest from bank deposits or bonds can be seen as a foundational source of returns. In the blockchain world, with the rise of staking and re-staking, this model has evolved into something new.

Re-staking is not just an investment strategy; it is a fundamental source of returns within the blockchain economy (see: Demystifying Re-staking). Although re-staking returns may not be high, they are stable and are likely to persist over the long term.

This is because two key factors remain unchanged:

• Staking is central to blockchain security: Blockchains rely on decentralized consensus mechanisms, and staking locks tokens to ensure network stability and security. The rewards stakers earn can be seen as a “network maintenance fee,” similar to the interest paid for maintaining the operations of a bank. As long as decentralized networks exist, there will always be a demand for staking, providing stable, foundational returns.

• Liquidity and capital efficiency are vital to the blockchain economy: In traditional finance, the liquidity of capital contributes to economic prosperity, and the same is true for blockchain. Re-staking strategies improve liquidity by allowing token holders to participate in network security while simultaneously engaging in other activities within the ecosystem, thus boosting capital efficiency.

However, there’s one thing we must acknowledge: the early-bird bonuses for re-staking are no longer available.

2. The Early-Bird Bonus for Re-staking Has Disappeared

In the article Demystifying Re-staking, I mentioned that re-staking is an infrastructure service, not the killer app of blockchain technology.

I said this because while security is important, it’s fundamentally just a basic need with a low ceiling.

In the early days of liquid staking, there were opportunities to capture the early-bird bonus of re-staking. For example, I discussed the strategy of "leveraging + liquidity mining" to further amplify re-staking rewards (see: Real-world: How to Maximize Re-staking Returns?). In the short term, this approach was effective.

But, as more funds have poured in, the opportunities have become scarcer, and the returns from leveraged liquidity mining have significantly decreased. In the Juice protocol on Blast, I tested three leveraged liquidity tokens for re-staking, and all of them incurred unrealized losses (see the image below, for more details see: Leverage + Mining = Best Re-staking Strategy).

However, since there are still re-staking airdrops, returns can still be generated. The high returns from early stages are no longer available, and new strategies are now needed.

3. New Strategies for ETH Re-staking

A new strategy can be summarized in one sentence: store weETH on AAVE, borrow ETH, and participate in DeFi.

AAVE is a decentralized lending protocol that allows users to deposit crypto assets to earn interest while also borrowing other assets. In re-staking strategies, AAVE plays a critical role. AAVE offers the largest amount of ETH that can be borrowed, which means it provides the largest low-risk leverage. This leverage is achieved by activating the E-mode feature, which I’ll explain in more detail.

weETH is the wrapped token for eETH. eETH represents a 1:1 locked ETH. When you hold eETH on the Ethereum mainnet, the amount of eETH you hold keeps increasing. However, when transferred to other networks, this increase in eETH translates into an increase in the price of weETH. Currently, one weETH ≈ 1.05232 eETH.

ETH is the native token of Ethereum, and the current lending rate on AAVE is 2.71%, which is relatively low compared to other lending protocols.

With this new strategy, you can still:

• Earn re-staking rewards from weETH.

• Benefit from Etherfi’s airdrop.

• Borrow ETH (or WETH) to release liquidity for weETH again, improving capital efficiency.

Of course, you will need to pay interest on the borrowed ETH. However, since weETH staking itself yields 4.41%, this can easily cover the interest costs.

The ARP1 project, which references this strategy for airdrops, can provide an estimated annual return of 2.224% including airdrop rewards. You can find detailed calculations in Real-world Beginner’s Guide: ARP1 Lets You Have Your Cake and Eat It Too.

Now, let's talk about how to borrow the maximum amount of ETH.

Follow the steps in the image: click the gear icon, then select "Manage E-Mode" to access the settings (see image below).

Take note of the switch indicated by the arrow in the image. My E-Mode is currently enabled; if yours isn’t, you’ll need to click it, then sign the transaction through your wallet to activate it.

Once activated, the maximum value of ETH-related assets you can borrow is 90%, meaning that with just 10% of your weETH, you can achieve a 100% re-staking effect with weETH. Of course, you can easily find opportunities to earn more than 3% on the borrowed ETH—this will be discussed in more detail at a later time.

If you find the steps above too complicated, I recommend you participate in the ARP1 project, which operates with a one-click mechanism. ARP1 not only allows leveraged re-staking but also offers WBTC-ETH liquidity mining rewards (see: here).

Conclusion

Bonuses are like summer ice cream: a moment’s hesitation in the heat, and their sweet flavor melts into a puddle of regret.

Every opportunity has its sweetest bonus period, and bonuses are never permanent. Those who capture the bonus rely on keen judgment and timely action.

Re-staking may have bid farewell to its early-bird era, but with smart strategies and efficient capital usage, we can still seize the next round of opportunities. Act quickly, before the new bonuses melt away in the heat of the market.

For airdrop updates, follow the new official WeChat account (the old one got banned):

About Airdrop Reference

Airdrop Reference is an innovative blockchain education and promotion platform aimed at spreading basic blockchain knowledge and helping ordinary users understand and participate in the development of blockchain technology. The mission of this project is to lower the entry barriers to blockchain, promote high-quality blockchain projects, and allow more people to enjoy the benefits of the Web3.0 era.

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