Restaking's purpose

Restaking allows staked $ETH used in securing Ethereum to also secure other networks, while giving Ethereum stakers additional yield on top of their $ETH staking rewards.

Restaking is not just an investment opportunity or a new financial primitive. Restaking is the path to open innovation on Ethereum. It is the solution for the cold-start problem encountered by new chains or other Actively Validated Services (AVSs) that require consensus. Restaking represents a sustainable, systemic innovation.

The problem it solves

Newly created AVSs (like chains, oracles, or bridges) require operators to validate transactions and establish consensus across the network. It is essential that the work of these operators is trustworthy and correct – otherwise the AVS cannot be relied on. Therefore, we require a mechanism of rewarding good operators (with tokens) and punishing bad ones (by slashing some of their stake).

Without restaking, rewards are paid and collateral is collected in the native currency of the new service, meaning the service must simultaneously attract a sufficient group of operators to validate the network and users to give the token any value and thus incentivise operators to act honestly. A new project with a $1m total stake is easy and cheap to overwhelm. Enter restaking: Now, operators can be held accountable and rewarded via ETH – meaning new projects benefit from Ethereum’s entire security layer, which is known for its robustness. The math holds up: 100 projects each staking $1mn are much easier to attack than 100 projects sharing their security – since that gives each of them a total stake of $100mn.

Restaking is here to stay

Consider other major innovations like MEV (Maximum Extractable Value), for instance. While rearranged transactions certainly optimise profitability, they bring no systemic benefit. In contrast, restaking offers restakers a profitable avenue backed by technology genuinely beneficial for the Ethereum ecosystem. This fundamental utility ensures the enduring relevance of restaking.

EigenLayer, the first protocol enabling restaking on Ethereum, represents just the initial step towards fostering open innovation on the network. Many additional projects, both on Ethereum and other chains, are already following suit. And that’s where Byzantine Finance comes in: By collaborating with a variety of restaking protocols, we build a solid foundation for the ecosystem with no single point of failure.