What is restaking? EigenLayer, AVS, and shared security explained

What is restaking?

To understand restaking, start with normal staking. When you stake ETH, you lock it to help secure the Ethereum network. In return, you earn roughly 3-4% APY. Your ETH does one job: securing Ethereum.

Restaking takes that staked ETH and gives it a second job — or a third, or a fourth. You take your already-staked ETH (or liquid staking tokens like stETH, rETH) and use it as economic security for additional services: oracles, bridges, data availability layers, keeper networks, and more.

Same capital. Multiple jobs. More yield.

The concept is powerful because it solves a real problem. Every new protocol that needs economic security would otherwise have to bootstrap its own validator set from scratch — an expensive, slow, and fragile process. Restaking lets them borrow Ethereum's existing security instead.

How does EigenLayer work?

EigenLayer is the protocol that pioneered restaking. It is a set of smart contracts deployed on Ethereum that act as a marketplace connecting three groups: restakers (who provide capital), operators (who run infrastructure), and AVS protocols (who need security).

Here is how the flow works:

1. You deposit stETH, rETH, or native ETH into EigenLayer's smart contracts.
2. EigenLayer delegates your stake to "operators" — entities that run the actual infrastructure for various services.
3. Operators validate for one or more AVS (Actively Validated Services) — protocols that need economic security to function.
4. You earn your base ETH staking rewards plus additional rewards from each AVS your stake secures. These additional rewards are often distributed as points or protocol tokens.
5. Risk: if an operator misbehaves or fails, your stake can be slashed by both Ethereum and the AVS. Multiple slashing conditions apply simultaneously.

Liquid restaking tokens (LRTs)

Just as liquid staking gave us stETH (a tradeable token representing staked ETH), the restaking ecosystem has created Liquid Restaking Tokens (LRTs) — tokens that represent restaked ETH.

Instead of locking your ETH in EigenLayer directly (which makes it illiquid), you deposit through an LRT protocol and receive a tradeable token in return. That token represents your restaked position and accumulates rewards from both staking and AVS validation.

LRTs add composability — you can use them in DeFi as collateral, in yield farming strategies, or in liquidity pools. But each additional layer of wrapping adds risk. Your exposure chain becomes: ETH → stETH → EigenLayer → LRT → DeFi protocol. If any link in that chain breaks, your position is affected.

Beyond EigenLayer — the restaking ecosystem

EigenLayer was first, but restaking is now a competitive landscape with multiple approaches to shared security:

Competition is healthy. It means multiple approaches to shared security are being tested, and protocols seeking economic security will have more options to choose from.

Where does the yield come from?

This is the most important question to ask about any yield source. For restaking, the answer is: AVS protocols pay for economic security.

Think of it this way: a new oracle network or bridge needs validators to operate. It could try to launch its own token, attract stakers, and build a validator set from scratch — an expensive and time-consuming process. Or it can use EigenLayer to rent security from ETH restakers, paying them for the service.

It is like renting out your security deposit to multiple landlords at once. Each landlord pays you a small fee for the guarantee your capital provides.

For more on evaluating yield sustainability, see DeFi Metrics and What Is Yield Farming?

Risks of restaking

Restaking amplifies both yield and risk. Understanding these risks is essential before committing capital. For a broader framework, see Understanding Risk.

• Compounding slashing risk — Your ETH can be slashed for Ethereum validation failures and for AVS-specific failures. If you are restaked across multiple AVS, you have multiple independent slashing conditions. A single operator mistake can trigger slashing from multiple directions.
• Smart contract risk — EigenLayer contracts, LRT protocol contracts, AVS contracts — each is a potential failure point. The more contracts in your exposure chain, the larger your smart contract attack surface.
• Operator risk — You delegate your restaked ETH to operators who run the actual validation. If an operator is incompetent, malicious, or has infrastructure failures, your stake gets slashed. You are trusting their operational security.
• Liquidity risk — LRTs may not always be redeemable 1:1 for ETH, especially during periods of market stress. If many people try to exit simultaneously, LRTs can trade at a discount.
• Complexity risk — ETH → stETH → EigenLayer → LRT → DeFi. Each layer adds risk that is difficult to quantify. The interaction effects between layers are not always well understood, even by experienced participants.
• Systemic risk — If restaking creates tightly interconnected failure modes, a slashing event in one AVS could cascade across the system. Shared security means shared risk.
• Point farming risk — Many restaking participants are farming points in anticipation of token airdrops, not earning real yield. When points resolve to tokens and the airdrop is distributed, mass exits are possible, creating sudden liquidity pressure.

The leverage concern

Restaking's biggest critics argue it is a form of re-hypothecation — using the same collateral to back multiple obligations simultaneously. This is exactly how traditional finance creates leverage, and it is the mechanism behind some of history's largest financial crises.

The counterargument: if the slashing system works correctly and is properly parameterized, restaking is designed to be safe. Each AVS can only slash a defined portion of restaked capital, and the system is meant to ensure that total potential slashing never exceeds the total stake.

But if slashing conditions are poorly calibrated, or if correlated failures cause simultaneous slashing across multiple AVS, losses could amplify rather than stay contained. Vitalik Buterin has publicly expressed concerns about "overloading Ethereum's consensus" — the risk that restaking could create expectations and failure modes that the base Ethereum protocol was not designed to handle.

The honest answer is: the system has not yet been stress-tested by a major adverse event. We do not know how cascading slashing will behave under real market stress. That uncertainty itself is a risk.

How CleanSky helps

Restaking positions are among the most complex in all of DeFi. Your capital may flow through multiple protocol layers, each with its own risks and reward streams. CleanSky makes this legible:

• Detects restaking positions across EigenLayer, Symbiotic, and LRT protocols automatically by reading the blockchain directly.
• Shows the full stack — what is restaked, through which operator, on which AVS — so you understand exactly where your capital is working and what it is exposed to.
• Surfaces compounding risk layers — instead of seeing a single "restaked ETH" balance, you see each layer of exposure individually, helping you understand the full risk profile of your position.

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