What is restaking in crypto?

Restaking is the practice of taking ETH that is already staked and committing it to secure additional networks or applications. The idea is to reuse Ethereum's existing pool of staked value instead of each new service building its own. In return, restakers may earn extra rewards, and they also take on extra risk.

How does EigenLayer restaking work?

EigenLayer is a set of smart contracts on Ethereum. According to its documentation, users who stake ETH directly, or who hold a liquid staking token, can opt in to these contracts and restake that value. The goal is to pool security across many services so each one does not have to recruit its own validators. If you are new to the base layer, start with Ethereum staking and liquid staking.

What are operators and AVSs in restaking?

EigenLayer has three main roles. Restakers supply the stake. Operators run the software and do the work. The services that use this security are called AVSs, short for actively validated services.

According to EigenLayer's docs, restakers delegate their stake to an operator. The operator then registers for groups of tasks called operator sets and allocates a specific slice of stake to each one. An AVS can only penalize the stake that was allocated to its own set, which is meant to stop one service's problem from spreading to every other service.

What are the risks of restaking, including slashing?

Slashing is a penalty that takes away part of the stake when an operator breaks the rules of a service, for example by doing a task incorrectly. EigenLayer turned on slashing on its mainnet on April 17, 2025, according to The Defiant.

EigenLayer's docs say delegated stake can be slashed under the conditions of whatever AVSs an operator runs. Slashed funds are either burned or, in some sets, sent to a recipient the AVS chooses. The docs also note that sets with redistribution may pay more but carry more slashing risk. This sits on top of the normal risks of proof-of-stake staking and the smart contract risk of the restaking protocol itself.

On the regulatory side, the SEC staff statement on liquid staking from August 2025 says plainly that it does not address restaking.

What are liquid restaking tokens?

A liquid restaking token, or LRT, is a receipt token from a protocol that restakes on a user's behalf. It works like a liquid staking token, but with restaking added.

LRTs can trade below the value of what backs them. In April 2024, CryptoSlate reported that Renzo's ezETH briefly fell to about $700 on Uniswap. Leveraged positions using ezETH as collateral were liquidated, which pushed more tokens onto the market. That episode shows how stacking staking, restaking and borrowing can magnify losses.

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