In this lesson
- find out what restaking is and what it was meant for
- understand why every layer of yield adds a layer of risk
- learn what happened to restaking in 2025 and 2026
Staked ETH already serves as a deposit once. Restaking came with an idea: why not use it a second, third, fourth time? The yield adds up – just like the height of a tower of blocks. Until somebody pulls out the wrong block.
How restaking works#
With restaking you promise that your staked ETH will also back other services – such as a network checking data, or a bridge. For that you get an extra reward. But if a service decides that an operator misbehaved, it can take part of your deposit.
- EigenLayer launched restaking in June 2023 and switched on penalties (slashing) on 17 April 2025.
- Liquid restaking tokens (LRTs) – such as weETH from ether.fi or rsETH from Kelp DAO – wrap it all into another token you can keep using in DeFi.
A tower of blocks#
Someone who puts ETH into liquid restaking and then uses the token as collateral for a loan stands on:
- the risk of Ethereum and staking,
- the risk of the liquid restaking contract,
- the risk of every service their ETH backs,
- the risk of a bridge, if they move the token to another network,
- the risk of the lending platform and of liquidation.
The yield from all the layers together tends to be a few percent higher than plain staking. The risk, though, is not "a few percent higher" – one faulty layer is enough for the whole tower to fall.
What happened#
- Money flowed out: the dollar value held in EigenLayer fell from 22 billion dollars (August 2025) to roughly 5.1 billion (September 2026) – partly because ETH itself fell, partly because people left as rewards turned out smaller than expected.
- ether.fi is leaving: one of the biggest providers removed restaking from its token in August 2026 and is leaving EigenLayer completely by the end of 2026.
- The rsETH hack (18 Apr 2026): attackers fooled the bridge rsETH used to move between networks and took about 292 million dollars. It hit two layers of the tower at once – a bridge and a liquid restaking token.
Higher yield = more places where it can go wrong
When something promises extra yield, always ask: where does the money come from, and what happens when one layer fails? If you do not know the answer, you are probably underestimating the risk.
Common myths#
- "Restaking is just staking with a higher yield." It is staking with extra risks on top.
- "Big volume means safety." The dollar value in restaking fell by three quarters within a year.
- "A liquid token can always be swapped back 1 : 1." Only while all the layers under it work.
Summary
- Restaking uses staked ETH as a deposit for other services too, for an extra reward.
- Every layer (contract, service, bridge, loan) adds risk.
- In September 2026 EigenLayer held about a quarter of its peak dollar value, and ether.fi is leaving.
- The 292M USD rsETH hack hit a bridge and a liquid restaking token at once.