Liquid restaking explained: problems LRTs solve and key protocols
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Lists three restaker pain points (picking services, costly claims, locked liquidity) and how LRTs address them, then names 13 restaking protocols and expects the sector to follow in LSDFi's footsteps.
Fueling EigenLayer: The Restaking Ecosystem 🚀 ✨
Restaking not only provides the crypto-economiic fueld for scalable and secure middleware (AVS), it also comes with benefits for (re)stakers, such as additional yield.
However, there are also challenges for restakers to navigate:
✦ Finding services to stake for can be challenging
✦ Claiming multiple tokens is cumbersome & costly (gas fees)
✦ Loss of liquidity (assets are locked)
This is why (liquid) staking protocols are important! To solve the above challenges, staking protocols introduce liquid restaking derivatives, designed to offer liquidity to illiquid assets deposited into EigenLayer.
This solves a number of problems:
✦ Simplifying restaking decision: Staking protocols might whitelist high-quality services and operators, reducing complexity for the end-user.
✦ Liquidity: Users can deploy their liquid restaking derivatives across DeFi.
✦ Automated backend process: Users can directly claim all the rewards into their wallets without having to face high gas fees for every claim.
Some notable Restaking protocols are:
✦ @restakefi
✦ @Euclidfi
✦ @KelpDAO
✦ @swellnetworkio
✦ @puffer_finance
✦ @ether_fi
✦ @renzoai
✦ @RioRestaking
✦ @Genesis_LRT
✦ @supermetafi
✦ @ionprotocol
✦ @RestakingCloud
✦ @Stake_Stone
Considering the abstraction of complexity that these protocols provide, we expect this to become an important part of the EigenLayer ecosystem. As the percentage of restaked ETH grows, this sector might follow in the footsteps of its big brother, LSDFi.
Are you ready, anon? 🪬✨
What came next · since 27 Mar 2024
Since then
Zero has written 25 more pieces on EigenLayer since this one.