Liquid Staking Tokens (LSTs) excel at providing foundational, predictable yield from a single-layer consensus. By staking native assets like ETH on a primary network (e.g., Ethereum via Lido, Rocket Pool), users receive a liquid token representing their stake and rewards. This creates a high-liquidity, low-complexity yield asset, exemplified by Lido's stETH holding over $30B in TVL and serving as the dominant collateral across DeFi lending markets like Aave and Compound.
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Comparisons
Liquid Staking Tokens (LSTs) vs. Liquid Restaking Tokens (LRTs)
A technical analysis comparing the risk-reward profile of base yield assets (LSTs like stETH) against their restaked derivatives (LRTs like ezETH) that offer additional AVS rewards.
Chainscore © 2026
introduction
THE ANALYSIS
Introduction: The Yield Stacking Evolution
A technical breakdown of the core trade-offs between Liquid Staking Tokens (LSTs) and Liquid Restaking Tokens (LRTs) for protocol architects.
Liquid Restaking Tokens (LRTs) take a different approach by layering security and yield. Protocols like EigenLayer and Kelp DAO allow users to restake their LSTs (or native ETH) to secure additional Actively Validated Services (AVSs), such as rollups (AltLayer) or data availability layers. This results in a trade-off of higher potential yield for increased smart contract and slashing risk, as restaked capital is now exposed to the performance of multiple, often newer, protocols.
The key trade-off: If your priority is capital efficiency and deep, stable liquidity for DeFi composability, choose LSTs like stETH or rETH. If you prioritize maximizing yield on staked assets and are willing to accept the systemic complexity and nascent risk profiles of securing new infrastructure, choose LRTs like ezETH or rsETH.
tldr-summary
LSTs vs. LRTs
TL;DR: Core Differentiators
Key strengths and trade-offs at a glance. LSTs focus on base-layer yield, while LRTs unlock multi-layer rewards but add complexity.
01
LSTs: Simpler Yield & Liquidity
Direct staking derivative: Tokens like Lido's stETH or Rocket Pool's rETH represent a claim on native staking rewards (e.g., ~3-5% APR on Ethereum). This matters for protocols and users seeking predictable, low-risk yield from a single blockchain's consensus layer with deep liquidity (e.g., stETH's $30B+ TVL).
~3-5%
Typical Base APR
$30B+
stETH TVL
03
LRTs: Multi-Layer Yield Stacking
Restaking rewards: Tokens like EigenLayer's ezETH or Kelp's rsETH accrue rewards from both Ethereum consensus and Actively Validated Services (AVSs) like EigenDA or oracle networks. This matters for yield-maximizing users and protocols willing to accept additional smart contract and slashing risks for potentially higher APRs (e.g., 10-15%+).
10-15%+
Potential Combined APR
$10B+
EigenLayer TVL
CORE INFRASTRUCTURE COMPARISON
Head-to-Head Feature Matrix: LSTs vs LRTs
Direct technical and economic comparison for protocol architects and CTOs.
| Metric / Feature | Liquid Staking Tokens (LSTs) | Liquid Restaking Tokens (LRTs) |
|---|---|---|
Primary Yield Source | Base Layer Staking (e.g., ETH) | Restaking Rewards (EigenLayer AVSs) |
Key Risk Profile | Slashing on Single Chain | Slashing Across Multiple AVSs |
Exemplar Protocols | Lido (stETH), Rocket Pool (rETH) | EigenLayer (eigenPOD), Kelp DAO (rsETH) |
Typical APY Range | 3-5% | 5-15%+ |
Core Innovation | Liquidity for Staked Assets | Capital Efficiency & Shared Security |
Dominant Use Case | DeFi Collateral & Leverage | Bootstrapping New Protocol Security |
Total Value Locked (TVL) | $50B+ | $10B+ |
Native Token Required |
pros-cons-a
PROS AND CONS
LSTs vs. LRTs: Core Trade-offs
Key strengths and trade-offs at a glance for CTOs and architects evaluating yield strategies.
01
LSTs: Capital Efficiency
Unlock DeFi liquidity: LSTs like Lido's stETH ($35B+ TVL) and Rocket Pool's rETH can be used as collateral across major lending protocols (Aave, Compound, Maker). This provides immediate leverage and yield stacking without exiting your stake. This matters for protocols needing to maximize capital utility.
02
LSTs: Mature Risk Profile
Battle-tested security: Leading LST providers have operated for years with billions secured. Risks are well-understood: smart contract risk, validator slashing, and centralization (e.g., Lido's 32% Ethereum stake). This matters for risk-averse treasuries prioritizing stability over novel yield.
03
LRTs: Multi-Layer Yield
Restaking rewards on top of staking: LRTs like EigenLayer's eETH or Kelp DAO's rsETH capture staking APR + AVS (Actively Validated Services) rewards. This can significantly boost yield (e.g., 5-15%+ potential) by securing new protocols like EigenDA or Lagrange. This matters for funds seeking maximal yield from idle assets.
04
LRTs: Protocol Innovation Leverage
Early access to new cryptoeconomic security: By restaking, you provide security to nascent AVSs, which may grant token airdrops or fee shares. This matters for protocols wanting to align with and benefit from the growth of new infrastructure layers (e.g., oracles, data availability).
05
LSTs: Lower Complexity Risk
Avoids smart contract cascades: LSTs interact primarily with the consensus layer. LRTs add layers of smart contract risk from AVS operators, delegation managers, and withdrawal queues. This matters for engineering teams wanting to minimize dependency and integration surface area.
06
LRTs: Emerging & Unquantified Risks
Novel slashing conditions: AVSs can define new slashing rules for misbehavior, creating uncorrelated risks beyond base-layer validation. Liquidity is also nascent compared to LSTs. This matters for architects who must model tail-risk scenarios and ensure protocol solvency.
pros-cons-b
LSTs vs. LRTs
Liquid Restaking Tokens (LRTs): Pros and Cons
Key strengths and trade-offs at a glance. Choose based on your protocol's need for foundational security or yield maximization.
01
LSTs: Capital Efficiency
Unlocks liquidity from staked assets: LSTs like Lido's stETH ($30B+ TVL) and Rocket Pool's rETH allow users to stake ETH and use the token in DeFi (e.g., lending on Aave, collateral on Maker). This matters for users who need to maintain exposure to staking rewards while accessing capital for trading or leverage.
02
LSTs: Maturity & Stability
Battle-tested infrastructure: Major LSTs have operated for years with billions secured. Lido's stETH has deep liquidity on DEXs like Curve and Uniswap V3, ensuring minimal slippage. This matters for institutional users and protocols requiring a stable, liquid derivative for treasury management or integrations.
03
LRTs: Yield Amplification
Layered rewards from AVSs: LRTs like EigenLayer's eETH and Kelp DAO's rsETH restake LSTs to secure Actively Validated Services (AVSs) like EigenDA, earning additional rewards on top of base staking yield. This matters for yield-optimizing users and protocols willing to accept new slashing risks for potentially higher APY.
04
LRTs: Protocol Security Provision
Monetizes cryptoeconomic security: LRTs allow new protocols (e.g., alt-DA layers, oracles) to bootstrap security by leveraging Ethereum's staked capital without needing their own token. This matters for Protocol Architects building middleware who need cost-effective, shared security instead of bootstrapping a new validator set.
05
LSTs: Lower Complexity Risk
Single-point slashing risk: LSTs are exposed only to the underlying consensus layer (e.g., Ethereum) slashing conditions. This matters for risk-averse institutions and protocols where the simplicity and predictability of a single failure mode is preferable to the multi-layered risk of AVSs.
06
LRTs: Emerging Risk Stack
Untested slashing conditions: LRTs introduce new risks from the AVSs they secure (e.g., operator collusion, faulty software). Protocols like EigenLayer are still defining slashing frameworks. This matters for CTOs who must audit new dependencies and assess the systemic risk of cascading failures across the restaking ecosystem.
CHOOSE YOUR PRIORITY
Strategic Use Cases: When to Choose Which
LSTs for DeFi
Verdict: The established, high-liquidity foundation. Strengths: LSTs like Lido's stETH, Rocket Pool's rETH, and Coinbase's cbETH offer deep, battle-tested liquidity across major DeFi protocols (Aave, Compound, Uniswap). Their value is derived from a single, predictable source (Ethereum consensus rewards), making them ideal as stable collateral for lending (e.g., MakerDAO's DAI minting) or as a core liquidity pair. Integration is straightforward with mature oracle support from Chainlink and Pyth.
LRTs for DeFi
Verdict: The higher-yield, higher-complexity accelerator. Strengths: LRTs like EigenLayer's eETH and Kelp DAO's rsETH unlock additional yield from Actively Validated Services (AVSs) like EigenDA, AltLayer, and Lagrange. This creates novel yield-bearing collateral with potentially superior APY. However, they introduce smart contract and slashing risks from the underlying AVSs. Best used in yield-optimizing vaults (e.g., Pendle Finance) or as specialized collateral in newer, risk-tolerant lending markets.
LSTs vs. LRTs
Technical Deep Dive: Slashing, AVS Dependencies, and Composability
A technical comparison of Liquid Staking Tokens (LSTs) and Liquid Restaking Tokens (LRTs) focusing on core risk vectors, ecosystem dependencies, and composability within DeFi.
LSTs face single-layer slashing risk, while LRTs inherit multi-layer risk. LSTs like Lido's stETH are only exposed to slashing penalties from the underlying consensus layer (e.g., Ethereum). LRTs, such as those from EigenLayer, are additionally exposed to slashing from the Actively Validated Services (AVSs) they secure. This creates a risk stack where a failure in an AVS like EigenDA or a cross-chain bridge can lead to the slashing of the restaked ETH backing the LRT, beyond just beacon chain penalties.
verdict
THE ANALYSIS
Final Verdict and Decision Framework
A data-driven framework to determine whether Liquid Staking Tokens (LSTs) or Liquid Restaking Tokens (LRTs) align with your protocol's risk-reward and yield objectives.
Liquid Staking Tokens (LSTs) excel at providing a stable, predictable yield derived from a single, secure base layer. Because they are backed by native staking on a primary chain like Ethereum, their risk profile is well-understood and their yields are relatively consistent, typically ranging from 3-5% APR. For example, the Lido stETH token, with over $30B in TVL, dominates this market by offering deep liquidity and integration across DeFi protocols like Aave and Curve, making it the de facto standard for capital efficiency without sacrificing base-layer security.
Liquid Restaking Tokens (LRTs) take a different approach by leveraging the security of a base layer (like Ethereum) to bootstrap and secure additional, higher-yield services, such as EigenLayer Actively Validated Services (AVSs). This results in a significant trade-off: substantially higher potential yields—often targeting 10-20%+ APR—but introduces new smart contract and slashing risks from the AVSs themselves. Protocols like Ether.fi's eETH and Renzo's ezETH bundle this restaked exposure, creating a composite asset whose value is tied to the performance of multiple external systems.
The key trade-off is security-for-yield. If your priority is capital preservation, deep liquidity, and predictable returns for core treasury management or as a low-risk collateral asset, choose LSTs. They are the established, battle-tested foundation. If you prioritize maximizing yield on idle assets and are willing to underwrite the novel risks of emerging crypto-economic services to earn points, airdrops, and premium rewards, choose LRTs. They represent the frontier of yield optimization but come with a less proven risk model.
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