What Is Restaking? A Guide to Pooled Security
Restaking is a crypto-economic security mechanism that enables staked assets (such as ETH) to be reused to secure additional decentralized protocols, known as Actively Validated Services (AVSs). By allowing validators to "pool" their security across multiple networks, restaking increases capital efficiency for stakers and lowers the barrier to entry for new applications needing decentralized trust.
The evolution of Proof-of-Stake (PoS) has transformed Ethereum into the most secure decentralized network in the world, secured by billions of dollars in staked capital. However, this massive pool of economic security has historically been rigid—locked solely to the Ethereum network itself. New decentralized applications (dApps) and infrastructure protocols often face a "cold start" problem: they must bootstrap their own validator sets from scratch, which is costly, slow, and often results in fragmented security.
Restaking solves this by turning staked capital into a flexible resource. It allows the same ETH securing the Ethereum mainnet to simultaneously secure other protocols, such as oracles, bridges, and data availability layers. This concept of "pooled security" or "shared security" is reshaping the DeFi sector, creating new yield opportunities for users and accelerating innovation for developers.
What is Restaking?
Restaking is the process of taking an asset that is already staked on a blockchain (like Ethereum) and pledging it to secure additional services.
In a traditional staking model, your capital does one job: it secures the layer-1 blockchain. If you want to secure a new oracle network or sidechain, you would typically need to unstake your assets, move them, and restake them—or buy a new native token entirely. Restaking breaks this one-to-one relationship. It introduces a "one-to-many" model where a single validator can opt in to secure multiple networks (AVSs) using the same underlying collateral.
This creates a marketplace for decentralized trust. Protocols can "rent" security from Ethereum's existing validator set rather than building their own. For stakers, it means their capital works harder, earning rewards from both the base layer (Ethereum) and the additional services they secure.
How Restaking Works: The Mechanism
The restaking architecture generally involves three key participants: stakers, operators, and Actively Validated Services (AVSs).
- Stakers: Users who deposit their assets (either native ETH or Liquid Staking Tokens like stETH) into restaking smart contracts.
- Operators: Entities that run the validator nodes and software required to secure the AVSs. Stakers often delegate their assets to operators rather than running complex infrastructure themselves.
- Actively Validated Services (AVSs): The protocols purchasing security. These can be anything from data availability layers and sidechains to oracle networks and bridges.
When a staker deposits funds, they grant a smart contract the ability to "slash" (penalize) their stake if the operator behaves maliciously or fails to perform duties for the AVS. In exchange for accepting these new slashing conditions, the staker receives additional yield generated by the AVS fees. This mechanism extends Ethereum's cryptoeconomic trust to any application that needs it.
Liquid Restaking Tokens (LRTs)
Just as Liquid Staking Tokens (LSTs) like stETH unlocked liquidity for staked ETH, Liquid Restaking Tokens (LRTs) act as the liquid receipt for restaked assets.
When users deposit ETH or LSTs into a restaking protocol, their capital is typically locked. To preserve capital efficiency, liquid restaking protocols issue LRTs (e.g., eETH, pufETH) that represent the user's principal plus accrued rewards. These tokens are fully composable within DeFi, meaning users can hold an LRT to earn restaking rewards while simultaneously using that same token as collateral in a lending protocol or liquidity in a decentralized exchange (DEX).
This introduces a layer of complexity ("leverage on leverage") but significantly boosts the utility of restaked capital, making it a foundational primitive in the modern DeFi market.
Benefits of Restaking
Restaking offers distinct advantages for all participants in the Web3 economy:
- Capital efficiency: Validators and stakers earn multiple streams of yield (base layer rewards plus AVS fees) from a single capital deposit.
- Developer bootstrapping: New protocols can launch with strong security from day one by tapping into Ethereum's trust network, removing the need to issue a highly inflationary token just to incentivize validators.
- Unified network security: By aggregating security rather than fragmenting it across hundreds of independent chains, the entire network becomes more resilient against attacks.
Risks and Challenges
While powerful, restaking introduces new risk vectors that users and institutions must manage carefully.
- Slashing risk: The primary risk is that a validator could be slashed by an AVS due to a software bug or operator error. Because the stake is pooled, a slashing event in one protocol could result in the loss of the underlying ETH.
- Complexity and centralization: Managing node infrastructure for dozens of different AVSs is technically demanding. This favors large, sophisticated node operators, potentially leading to centralization where a few large entities control the majority of restaked ETH.
- Smart contract risk: Restaking protocols add layers of smart contracts between the user and the base layer. A bug in the restaking logic or the LRT contract could lead to loss of funds, regardless of the underlying blockchain's security.
Key Ecosystem Examples
The restaking sector has grown rapidly, with several key players defining the space:
- EigenLayer: The pioneer of restaking on Ethereum, establishing the marketplace between stakers and AVSs.
- Ether.fi, Puffer, and Renzo: Leading liquid restaking protocols that simplify the process for users, handling the operator delegation and issuing liquid receipts (LRTs).
- Symbiotic and Karak: Emerging protocols expanding the concept of restaking beyond just Ethereum ETH, allowing other assets (like ERC-20s such as LINK and USDC) to be used for shared security.
The Role of Chainlink in Restaking
For the restaking economy to function safely and at scale, it requires robust infrastructure to connect offchain data, verify reserves, and move assets across chains. The Chainlink Runtime Environment (CRE) acts as the orchestration layer that connects these diverse systems, enabling LRT protocols to operate efficiently across the DeFi market.
Valuing LRTs With the Chainlink Data Standard
For LRTs to be accepted as collateral in lending markets (like Aave or Morpho), protocols need accurate, tamper-proof price data. The Chainlink Data Standard—specifically Chainlink Data Feeds—provides the industry-standard reference prices for these assets. This ensures that liquidations occur fairly and that the DeFi market remains solvent even during volatility.
Verifying Backing With Proof of Reserve
As LRTs become widely adopted, users need assurance that the token in their wallet is truly backed by restaked ETH earning rewards. Chainlink Proof of Reserve provides automated, onchain verification of the reserves backing these liquid tokens. This transparency protects against fractional reserve practices and gives users confidence in the asset's solvency.
Cross-Chain LRTs With the Interoperability Standard
Liquidity is often fragmented across layer-2 networks (Arbitrum, Optimism, Base). The Chainlink Interoperability Standard, powered by the Cross-Chain Interoperability Protocol (CCIP), enables LRTs to be transferred securely between chains. This allows a user to restake on Ethereum mainnet and use their LRT as collateral on a fast, low-cost L2, unifying liquidity across the blockchain ecosystem.
Conclusion
Restaking represents a shift from static capital to dynamic, programmable trust. By allowing staked assets to secure multiple networks simultaneously, it unlocks new efficiency for stakers and lowers the barrier to innovation for developers. However, the added complexity demands rigorous risk management.
As the industry-standard oracle platform bringing the capital markets onchain, Chainlink provides the essential standards—data, interoperability, privacy, and verification—that underpin the safety of this new economy. By leveraging the Chainlink Runtime Environment to orchestrate Data Feeds, Proof of Reserve, and CCIP, the ecosystem ensures that the pooled security of restaking remains robust, transparent, and scalable.
What is Liquid Staking and Restaking? LST and LRT Animated Examples
The above video offers a clear, animated explanation of the difference between Liquid Staking and Restaking, using practical examples to visualize how capital flows through these protocols.
