What is a liquid restaking token?
A liquid restaking token (LRT) is a tokenised claim on staked ETH that has been “restaked” through EigenLayer to provide security to additional services (AVSs — Actively Validated Services). LRTs let users stack two yield layers: base ETH staking + EigenLayer restaking rewards from AVS commissions. Major LRTs include Ether.fi’s eETH, Renzo’s ezETH, and Kelp DAO’s rsETH.
How LRTs work
Four-layer construction. (1) User deposits ETH or LST. (2) The LRT protocol restakes through EigenLayer’s smart contracts. (3) The restaked position secures AVSs (data availability layers, oracle networks, bridges) operated by EigenLayer node operators. (4) Rewards from AVSs flow back to LRT holders. The LRT itself stays liquid — users can trade or use as DeFi collateral while the underlying restaking position continues earning.
The yield-risk tradeoff
LRT yields exceed LST yields by ~1-3% APR through AVS commissions. The cost: slashing risk multiplies. With native staking, slashing happens only for Ethereum consensus violations. With restaking, slashing can happen for AVS-specific failures (data availability disputes, oracle misbehavior). LRT holders bear cumulative slashing exposure across all AVSs their restaked position secures.
The market and structural risks
By mid-2024, EigenLayer’s TVL exceeded USD 15 billion. Vitalik Buterin has explicitly warned about “restaking risks” — the systemic concern that LRTs could leverage Ethereum’s economic security beyond its underlying capacity, creating fragility under stress scenarios. The cascading risk: an LRT de-peg could trigger AVS failures, which could trigger Ethereum-level consensus problems.
Regulatory considerations
LRTs face the same MiCA/SEC scrutiny as LSTs plus additional complexity from AVS commission income — potentially treated as securities-like income depending on AVS structure. Türkiye’s CASP framework would treat Türk LRT issuance as crypto-asset service activity subject to licensing.
Türkiye context
For Türk DeFi participants, LRTs offer enhanced yield on ETH holdings — material in a TRY-depreciation context where every additional bps of yield matters. However, the layered slashing risk requires sophisticated understanding most retail users lack. CASP-licensed Türk exchanges offering LRT products need explicit risk disclosure given the cumulative slashing exposure.
Related: Liquid Staking Derivative, EigenLayer Restaking, Data Availability.
Layered risk: slashing, derivatives and characterisation
A liquid restaking token represents staked assets that have been “restaked” to secure additional protocols, with the LRT itself remaining tradable. The appeal is capital efficiency — earning multiple layers of yield on the same underlying — but the risk stacks just as the rewards do. Restaking exposes the underlying to additional slashing conditions across every protocol it secures, so a fault in any one can impair the token. Economically the LRT behaves like a derivative or a structured product layered on top of staking, which raises the question of how regulators will characterise it — as a crypto-asset, a collective investment, or something closer to a security. Layered smart-contract and custody dependencies compound the picture: a holder is exposed not only to the base staking, but to every restaking contract, operator and bridge in the chain. These are exactly the kinds of compounded, hard-to-see risks that disclosure and legal review exist to surface.
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