What Is Restaking in Cryptocurrency? A Simple Guide to Earning More from Your Staked ETH
Restaking Earnings Calculator
How This Calculator Works
Calculate your potential earnings from Ethereum staking vs. restaking. Remember: restaking offers higher returns but comes with increased risk.
Your Estimated Returns
Standard Staking
3-5% APY
Restaking
8-12% APY
Risk Assessment
Imagine you’re already staking your Ethereum to help secure the network and earning 4% a year in rewards. Now, what if you could earn another 4-8% on that same ETH-without buying more? That’s restaking. It’s not magic. It’s not a new coin. It’s a smart way to reuse your staked assets to secure other blockchain services and get paid extra for it.
How Restaking Works (No Jargon)
Restaking lets you take your already-staked ETH and use it to help secure other apps and protocols built on top of Ethereum. Think of it like renting out your security guard to work extra shifts at nearby stores-without leaving your main job. You still earn your original staking rewards from Ethereum, but now you’re also getting paid to help protect new services like decentralized oracles, privacy tools, or rollups. The system that made this possible is called EigenLayer a decentralized protocol on Ethereum that allows validators to restake their ETH to secure additional services called Actively Validated Services (AVSs). It launched in March 2024 and quickly became the dominant player, locking up over $20 billion in ETH by October 2024. That’s about 15% of all ETH staked on Ethereum.Two Ways to Restake: Native vs. Liquid
There are two main paths to restake your ETH: native and liquid. They’re different in who can use them and how complex they are.- Native restaking is for people who run their own Ethereum validator node. You need 32 ETH, a dedicated computer (8+ CPU cores, 16GB RAM, 1TB SSD), and the technical know-how to install extra software for each service you want to secure. It’s powerful but not for beginners. Only about 35% of restakers do this.
- Liquid restaking is for everyone else. You stake your ETH with a service like EtherFi or Renzo, and you get back a token-like eETH or ezETH-that represents your staked ETH. Then you take that token and restake it on EigenLayer. The token automatically grows as you earn rewards from both Ethereum and the AVSs. It’s simpler, more accessible, and accounts for over 65% of restaked ETH.
Why Restaking Pays More (But Comes With Risk)
The big draw? Higher returns. Standard Ethereum staking gives you 3-5% APY. Restaking can bump that to 8-12% APY. That’s not a small difference. If you have 10 ETH worth $30,000, you could earn $2,400 instead of $1,200 a year. But here’s the catch: you’re taking on more risk. Ethereum has one set of rules for punishing bad behavior (called slashing). When you restake, you agree to additional slashing rules from every AVS you support. If one of those services gets hacked or your node goes offline for a few minutes, you could lose a chunk of your ETH-anywhere from 0.5% to 100%. One user on Crypto Twitter lost $1,200 in ETH after their node had a brief connectivity issue. It wasn’t a big failure, but because they were securing multiple services, the penalty added up. That’s the trade-off: more yield, more responsibility.
Who’s Using Restaking-and Why
Most restakers aren’t hobbyists. Data from Glassnode shows that 68% of restaked ETH is held by wallets with 1,000 ETH or more. These are institutions, professional stakers, and serious retail investors who understand the risks and have the tools to manage them. Why? Because restaking solves a real problem. New blockchain services used to need their own security. That meant spending millions to attract validators. Now, they can just offer a little extra yield to attract ETH that’s already secured Ethereum. It’s like a marketplace: AVSs bid for security, and validators choose where to put their stake based on risk and reward.The Downside: Complexity and Systemic Risk
Restaking isn’t perfect. Experts like Vitalik Buterin and researchers at the Ethereum Foundation have warned that linking so many protocols to one security layer could create dangerous domino effects. If one AVS gets hacked and triggers mass slashing, it could ripple across other services. That’s why EigenLayer recently capped any single AVS from claiming more than 5% of the total restaked ETH-just to prevent too much concentration. There’s also the issue of documentation. EigenLayer’s guides are solid (rated 4.2/5), but many AVS-specific instructions are confusing or outdated. A survey of 127 users found most spent 40-60 hours learning before feeling confident. Node sync issues between multiple protocols are the #1 complaint. And then there’s regulation. The U.S. SEC said in October 2024 that some restaking setups might count as securities offerings. That could change how these services operate-or even shut some down.
What’s Next for Restaking?
The market is growing fast. From Q1 to Q2 2024, restaking TVL jumped 320%. By 2026, analysts predict it could hit $100 billion. The next big step? Better tools for risk assessment. EigenLayer plans to launch a reputation system for validators and clearer dashboards to show which AVSs are safe. Liquid restaking tokens (LRTs) are also becoming more popular. CoinGecko predicts that by 2025, 40% of all restaked ETH will be through LRTs-not direct validators. That means even people who don’t run nodes will be part of this security layer.Should You Restake?
If you’re new to crypto, skip it. Restaking isn’t for beginners. You need to understand staking first, know how to monitor your node, and be ready for the possibility of losing part of your stake. If you’re already staking ETH and comfortable with the tech, restaking is one of the best ways to boost your returns. But don’t go all-in. Start small. Use a trusted liquid restaking provider like EtherFi or Renzo. Don’t restake your entire stash. And always read the terms of each AVS before signing up. Restaking isn’t the future of Ethereum-it’s already here. But like any powerful tool, it’s only as safe as the person using it.Is restaking the same as liquid staking?
No. Liquid staking lets you stake ETH and get a token (like stETH) that represents your stake and can be traded or used in DeFi. Restaking takes that staked ETH-even if it’s already liquid-and uses it to secure other protocols. You can do liquid staking without restaking, but restaking usually involves liquid staking tokens.
Can I lose my ETH with restaking?
Yes. You can lose part or all of your staked ETH if your node misbehaves or if an AVS you’re securing gets compromised. Each AVS has its own slashing rules. A simple network glitch could cost you 0.5% to 10% of your stake. That’s why monitoring and choosing trusted AVSs matters.
Do I need 32 ETH to restake?
Only if you’re doing native restaking. For liquid restaking, you can start with any amount. Services like EtherFi let you deposit 0.1 ETH or more, and they handle the rest. Your rewards are proportional to your share.
What’s the safest restaking option?
The safest option is using a well-audited liquid restaking provider like EtherFi or Renzo, and only restaking a portion of your ETH. Avoid running your own node unless you have experience. Stick to AVSs with clear documentation, low-risk profiles, and a track record. Never restake your entire ETH balance.
Is restaking regulated?
It’s unclear. The U.S. SEC has flagged some restaking arrangements as potential securities offerings. That means future rules could require KYC, licensing, or even ban certain models. If you’re in the U.S., treat restaking as a high-risk, regulatory gray area. Stay updated and avoid platforms that don’t disclose their legal stance.
What’s the difference between EigenLayer and other restaking protocols?
EigenLayer is the original and largest restaking protocol, holding 89% of the market. Others like Renzo, EtherFi, and Puffer Finance are competitors that offer similar services, often with better user interfaces or lower fees. But they all rely on EigenLayer’s core technology. Think of EigenLayer as the engine, and others as the cars built on top.
Restaking is just Wall Street repackaging risk as a yield farm. You think you’re earning 12%? You’re just betting your ETH on someone else’s code that hasn’t been tested in a bear market.
Done.
The premise of restaking fundamentally misunderstands the economic incentive structure of blockchain security. By decoupling validation from consensus, EigenLayer creates a misaligned reward-risk paradigm where capital efficiency is prioritized over network resilience. The slashing conditions across AVSs are not standardized, creating an unquantifiable systemic exposure that regulators will inevitably intervene to contain.
Moreover, the assumption that liquid restaking tokens mitigate risk is empirically false-they merely obfuscate it with abstraction layers that lack auditability.
USA built the internet. Now China’s building the next blockchain. Meanwhile, we’re over here restaking ETH like it’s a crypto bingo card. Y’all are so obsessed with APY you forgot what crypto was supposed to be about.
Freedom. Decentralization. Not 12% yields on someone else’s code.