Restaking Single-Sided Assets vs. Restaking LP Positions

For maximum capital efficiency and simplicity. Your capital (e.g., ETH, SOL) is not exposed to impermanent loss and earns base staking + restaking rewards. Ideal for long-term holders and protocols like EigenLayer, Karak, and Symbiotic seeking to bootstrap security with minimal complexity. TVL dominance (~$15B+ on Ethereum) shows strong validator preference.

For yield aggregation and capital recycling. Leverages existing DeFi liquidity (e.g., Uniswap v3, Curve pools) to simultaneously earn trading fees + restaking rewards. Protocols like Kelp DAO, Renzo, and Puffer use this to attract TVL. Best for sophisticated LPs who already provide liquidity and want to amplify returns, accepting the added smart contract and IL risk.

Primary risk is slashing and protocol failure. Your exposure is limited to the restaking middleware (e.g., EigenLayer operators) and the AVSs (Actively Validated Services) you opt into. This is a more isolated risk model, easier to audit and manage. Suitable for risk-averse institutions allocating to crypto-native yields.

Compound risk from IL, DEX failure, and slashing. Your capital faces market volatility from the pool assets plus the restaking stack. Smart contract exposure is higher (DEX + restaking contract). This demands active management and is best for funds with dedicated risk teams using platforms like Gamma or Steer for concentrated liquidity.

Lower integration complexity. Single-sided restaking interacts primarily with the restaking protocol's smart contracts. Easier to automate and monitor via services like Chainscore or Blockdaemon. The standard is set by EigenLayer's core contracts, making dependency management straightforward for integrators.

Higher integration and monitoring burden. Requires managing LP positions (e.g., minting NFTs, adjusting ranges) in addition to restaking flows. Integration tests must cover DEX interactions (Uniswap, Balancer) and restaking. Tools like DefiLlama and Aperture Finance are needed for position health tracking.

Direct exposure to a single asset like ETH or SOL. This eliminates impermanent loss (IL) risk entirely and simplifies portfolio management. Ideal for protocols with large, concentrated treasuries (e.g., a DAO holding 10,000 ETH) seeking to maximize security yield without managing LP dynamics.

No need to manage liquidity pool ratios, fees, or harvest/compound cycles. Integration is straightforward with providers like EigenLayer (ETH) or Picasso Network (SOL). This reduces engineering overhead and smart contract risk, making it a fit for teams prioritizing set-and-forget security.

Combines restaking rewards with LP fees and incentives. On networks like Ethereum (via Pendle) or Avalanche, this can boost total APY by 5-15%+. Critical for protocols aiming to maximize treasury growth, especially when paired with stablecoin pairs (e.g., ETH/USDC) to mitigate some IL.

One capital deposit serves multiple purposes: providing liquidity, earning trading fees, and securing AVSs. This leverages composability primitives like Kelp DAO's LP restaking or ether.fi's eETH. Best for DeFi-native protocols that already maintain LPs and want to supercharge their capital.

Forgoes LP fee revenue and farm incentives. Yield is typically limited to restaking rewards and potential airdrops. On EigenLayer, native restaking APY can be <5%, significantly lower than optimized LP strategies. A trade-off for simplicity and risk reduction.

Adds smart contract risk from the DEX (e.g., Uniswap V3) and the restaking wrapper. Introduces impermanent loss, which can negate yield gains in volatile markets. Requires active monitoring and hedging strategies, increasing operational burden.

Direct exposure to a single asset like ETH or SOL. This simplifies risk modeling and avoids impermanent loss. It's the primary strategy for protocols like EigenLayer and Babylon, ideal for users with a strong directional conviction on the underlying asset.

Maximizes native protocol rewards. Restaking ETH on EigenLayer directly secures AVSs and earns Eigen Points & potential airdrops. This matters for users prioritizing alignment with a specific ecosystem's security and incentive programs over raw APY.

Stack multiple yield sources. An ETH/USDC LP token on Uniswap V3 can be restaked on Symbiotic or Kelp DAO to earn trading fees + liquidity incentives + restaking rewards. This can significantly boost APY for yield-optimizing portfolios.

One asset, multiple utilities. A single LP position provides liquidity for DeFi while simultaneously securing other networks. This is critical for protocols like Renzo and Swell that leverage LP tokens to bootstrap TVL and secure their own Layer 2s or AVSs.

Capital is locked in restaking contracts. While some protocols offer liquidity tokens (e.g., ezETH, weETH), exiting often involves secondary markets with potential discounts. This matters for protocols needing flexible treasury management or users sensitive to lock-up periods.

Exposure to DEX risks + restaking slashing. Combines impermanent loss from the underlying AMM with smart contract and slashing risks from the restaking platform. This is a critical consideration for risk-averse institutions or protocols using conservative treasury strategies.