In the past two months, Ethereum (ETH) has shown a strong upward trend, with prices reaching new highs at several key points, attracting significant attention from institutions and high-net-worth investors regarding ETH's investment value. Along with the price increase, validators are also seeking more efficient yield avenues, making restaking a market hotspot. Data shows that the total locked value of Ethereum restaking protocols has now surpassed $30 billion.

Restaking is an emerging yield strategy within the Ethereum ecosystem that allows validators to reinvest their staked ETH into supporting other protocols or services to earn additional returns. In simple terms, it means "staked assets can be staked again," thereby achieving compounded returns.

Restaking typically relies on Liquid Staking Protocols to be realized. The process is roughly as follows:

• Users lock ETH into a staking contract, becoming validators or participating in an existing validator pool.
• Liquid staking protocols issue representative tokens (such as stETH, rETH, etc.) equivalent to the locked assets, which can be freely traded or reinvested into other DeFi protocols.
• Users then restake these representative tokens into protocols that support restaking (such as EtherFi, Eigen) to earn additional yields.

Compared to simple locking, the advantage of restaking lies in balancing liquidity and yield efficiency: validators can continue to earn staking rewards while also obtaining additional interest or token incentives through restaking protocols, thereby amplifying overall returns.

However, restaking is not without risks. First, the involvement of multiple layers of smart contracts increases technical and security risks; if a protocol has vulnerabilities or is attacked, funds may be at risk. Second, price fluctuations of representative tokens may affect overall returns, increasing market risk. Finally, staked ETH is still subject to on-chain penalty mechanisms; for instance, if validators violate rules or network consensus is abnormal, returns may also be reduced.

The restaking sector is still in its infancy, and as the market continues to heat up and pioneering projects gradually take shape, capital inflow and user activity are steadily increasing. Next, we will further outline potential projects worth paying attention to in this sector.

EigenCould (formerly EigenLayer) is the first team to develop and introduce the Restake model to the community. It allows validators to use their staked ETH or liquid staking tokens (LSTs) to validate other decentralized applications (dApps) and services, thereby enhancing the security of these applications and providing additional returns for validators.

The core of EigenCould lies in its "Active Validation Service" (AVS) model. Validators delegate their staked ETH or LSTs to operators, who are responsible for providing validation services for AVS. These services ensure the correct and secure operation of AVS by installing the necessary software. In return, operators receive validation rewards from AVS and return them to restakers.

Since its launch in June 2023, EigenCould's total locked value (TVL) has surged from $110 million to over $10 billion, becoming one of the important players in the DeFi space. The protocol has received investment support from well-known institutions such as Andreessen Horowitz (a16z).

On September 6, Binance and Coinbase announced the launch of their token EIGEN. As of September 18, EIGEN's market capitalization was approximately $680 million, with a 24-hour trading volume exceeding $340 million, and the current price was around $2.01, with a circulating supply of approximately 338 million tokens and a total supply of 1.67 billion tokens.

Symbiotic

Launched in June 2024, Symbiotic is a shared security protocol that allows various networks to freely build and manage their staking systems without permission. In other words, Symbiotic empowers networks to customize their staking processes, choose types of staking assets, node operators, as well as reward and penalty mechanisms, while relying on Ethereum's immutable core contracts to ensure system security.

The Symbiotic protocol consists of five interrelated modules, including collateral for economic security, treasury for the staking layer, operators for the infrastructure layer, resolvers for the arbitration layer, and networks for the service layer.

It is worth mentioning that Symbiotic has become the second-largest restaking protocol after EigenLayer, but compared to EigenLayer, which is ETH-centric, Symbiotic supports a richer variety of staking options, providing greater flexibility and applicability.

As of now, Symbiotic has not issued a native token, and its reward mechanism mainly relies on a points system and external distribution tokens from cooperative networks.

Kernel DAO

Through its three core products—Kernel, Kelp, and Gain—Kernel DAO allows users to restake their already staked assets (such as ETH, BNB, and BTC) to participate in multiple decentralized networks and services, thereby earning additional rewards. The protocol aims to provide a more efficient and lucrative staking experience without requiring users to handle complex technical details.

Kernel DAO also incorporates an automated penalty mechanism and risk management system to ensure the overall security of the network. If validators fail to fulfill their duties or engage in violations, part or all of their staked assets may face forfeiture. The platform monitors validator behavior in real-time and dynamically adjusts their staking limits to avoid overcommitment, thereby reducing potential risks. Additionally, Kernel DAO's architecture supports middleware services such as decentralized identity authentication, data oracles, and cross-chain interoperability, allowing external applications to enjoy security guarantees without having to build their own validator infrastructure.

Currently, the price of the token KERNEL is approximately $0.2035, with a 24-hour trading volume of about $18 million and a market capitalization of around $45 million. The total supply of KERNEL is 1 billion tokens, with a circulating supply of approximately 222 million tokens. The historical highest price of this token was $0.4998.

Solayer

Solayer is a restaking protocol based on the Solana blockchain. Solayer acts as a validator by leveraging Solana's staking network, achieving a highly decentralized and secure architecture while avoiding the trust risks associated with centralized service providers or proprietary tokens.

The restaked assets within Solayer not only continue to provide validation services for the Solana network but also support applications such as oracles and cross-chain bridges, thereby generating additional returns. Solayer introduces a high-performance architecture to achieve low latency and high throughput, suitable for scenarios such as GameFi and real-time trading.

Currently, the price of Solayer's native governance token LAYER is approximately $0.54, with a 24-hour trading volume of about $13 million and a market capitalization of around $154 million, with a circulating supply of approximately 284 million tokens. The historical highest price of this token was $0.61.

Summary:

Restaking not only allows validators to continue earning basic staking rewards but also enables them to obtain additional returns by participating in other protocols or services, significantly improving capital efficiency. However, it involves multiple layers of smart contracts and market fluctuations, which still pose technical and market risks. Investors should fully understand the protocol mechanisms, token price fluctuations, and on-chain penalty rules, carefully assess their risk tolerance, and avoid blindly pursuing high returns while neglecting potential losses.

Disclaimer: The content of this article is for informational reference only and does not constitute any investment advice. Investors should assess risks and make cautious decisions on their own.

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Original text: “Blockchain Staking Upgrade: A Review of Restaking Projects and Investment Opportunities”

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