Restaking Yield-Bearing Assets (e.g., staked ETH via Lido's stETH, Rocket Pool's rETH) excels at maximizing capital efficiency because it allows a single asset to generate multiple layers of yield and security. For example, an operator can simultaneously earn staking rewards from Ethereum and additional rewards from an EigenLayer AVS, effectively leveraging the same capital. This approach has driven significant adoption, with EigenLayer's Total Value Locked (TVL) surpassing $15 billion, largely composed of liquid staking tokens (LSTs).
LABS
Comparisons
Restaking Yield-Bearing Assets vs. Restaking Non-Yield-Bearing Assets
A technical comparison of the base yield profile, total return potential, and risk-adjusted calculations for AVS rewards when restaking yield-bearing versus non-yield-bearing assets on protocols like EigenLayer, Karak, and Symbiotic.
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introduction
THE ANALYSIS
Introduction: The Core Strategic Decision in Restaking
Choosing what to restake—yield-bearing or non-yield-bearing assets—is a foundational decision that dictates your protocol's security model, capital efficiency, and risk profile.
Restaking Non-Yield-Bearing Assets (e.g., native ETH, stablecoins) takes a different approach by prioritizing security and protocol simplicity. This strategy results in a trade-off: you forgo the base yield layer but gain a more straightforward risk model and often lower smart contract exposure. Protocols like Babylon for Bitcoin restaking or EigenLayer's native ETH pool exemplify this, appealing to users wary of LST-specific risks like depegging or validator slashing cascades.
The key trade-off: If your priority is absolute yield optimization and composability within the DeFi ecosystem, choose yield-bearing restaking. If you prioritize security isolation, risk minimization, and direct cryptoeconomic guarantees, choose non-yield-bearing restaking. The former is ideal for yield-aggregating strategies on Ethereum, while the latter is crucial for securing high-value, standalone networks or oracle services like Hyperlane or AltLayer.
tldr-summary
Restaking Yield-Bearing vs. Non-Yield-Bearing Assets
TL;DR: Key Differentiators at a Glance
Core trade-offs between maximizing capital efficiency and minimizing protocol risk.
01
Restaking Yield-Bearing Assets (e.g., stETH, rETH)
Capital Efficiency: Earns base staking yield (e.g., 3-5% on Ethereum) plus restaking rewards from AVSs. This matters for protocols like EigenLayer where the goal is to maximize total return on locked capital.
02
Restaking Yield-Bearing Assets (e.g., stETH, rETH)
Complex Risk Stack: Adds smart contract risk from the yield-bearing wrapper (e.g., Lido, Rocket Pool) on top of slashing/penalty risks from the AVS. This matters for risk-averse operators or protocols with conservative treasury management.
03
Restaking Non-Yield-Bearing Assets (e.g., native ETH)
Simplified Security Model: Bears only the slashing risks defined by the chosen Actively Validated Service (AVS), like EigenDA or Lagrange. This matters for builders prioritizing a clean, auditable security guarantee for their decentralized sequencer or oracle network.
04
Restaking Non-Yield-Bearing Assets (e.g., native ETH)
Opportunity Cost: Forgoes the base-layer staking yield (~3-5% APY). This matters for large-scale operators (e.g., Figment, Chorus One) where the foregone yield on thousands of ETH represents significant revenue leakage versus using a liquid staking token.
HEAD-TO-HEAD COMPARISON
Feature Matrix: Yield-Bearing vs. Non-Yield-Bearing Restaking
Direct comparison of core economic and operational characteristics for restaking strategies.
| Metric / Feature | Yield-Bearing Restaking (e.g., stETH, rETH) | Non-Yield-Bearing Restaking (e.g., native ETH, LSTs pre-yield) |
|---|---|---|
Base Yield Accrual | ||
Typical Base APY Range | 3.0% - 5.5% | 0% |
Primary Restaking Protocol Support | EigenLayer, Kelp DAO | EigenLayer, Babylon |
Total Value Locked (TVL) Share |
| < 10% of EigenLayer |
Liquidity Withdrawal Timeline | Days (unstaking + withdrawal queue) | Hours to Days (protocol dependent) |
Complexity & Smart Contract Risk | Higher (multiple yield layers) | Lower (single asset layer) |
Dominant Use Case | Maximizing yield from a single capital position | Security for new chains (Bitcoin, Cosmos) with minimal yield dilution |
pros-cons-a
Yield-Bearing vs. Non-Yield-Bearing
Pros and Cons: Restaking Yield-Bearing Assets
Key strengths and trade-offs at a glance for protocol architects and treasury managers.
01
Yield-Bearing: Capital Efficiency
Dual yield generation: Stake once to earn both native staking rewards (e.g., ETH staking via Lido, Rocket Pool) and restaking rewards (e.g., EigenLayer points, AVS incentives). This matters for maximizing returns on a single capital base, a critical metric for large treasury deployments.
02
Yield-Bearing: Protocol Complexity & Risk
Increased smart contract and slashing risk: Adds dependency on the underlying LST protocol (e.g., stETH, rETH). A failure in the LST provider or a slashing event cascades to the restaked position. This matters for risk-averse protocols where capital preservation is paramount.
03
Non-Yield-Bearing: Simplicity & Security
Direct slashing and consensus participation: Restaking native assets (e.g., plain ETH, MATIC) provides a direct, unmediated claim on the base layer's security. This matters for protocols like AltLayer or Omni Network that require the strongest possible crypto-economic guarantees for their AVS.
04
Non-Yield-Bearing: Opportunity Cost
Forfeited base yield: Capital locked in restaking does not earn the underlying chain's staking APR (~3-5% for Ethereum). This matters for long-term holders where the compounded loss of native yield can significantly outweigh restaking rewards, especially in bull markets.
pros-cons-b
Yield-Bearing vs. Non-Yield-Bearing
Pros and Cons: Restaking Non-Yield-Bearing Assets
Key strengths and trade-offs at a glance. Choose based on capital efficiency, risk exposure, and protocol compatibility.
01
Yield-Bearing: Capital Efficiency
Compounding yield on staked capital: Assets like stETH or rETH generate native staking rewards (e.g., ~3-5% APY) before restaking. This creates a double-dip effect, maximizing total return on locked capital. This matters for protocols like EigenLayer where TVL growth is critical and for users seeking optimal APR from a single deposit.
02
Yield-Bearing: Protocol Integration
Preferred by major AVS ecosystems: Leading Actively Validated Services (AVS) like EigenDA, Eoracle, and Lagrange often launch with native support for liquid staking tokens (LSTs). This results in broader utility, higher liquidity, and earlier access to new restaking opportunities compared to non-yield-bearing alternatives.
03
Non-Yield-Bearing: Risk Isolation
Decouples staking risk from restaking slashing: Using assets like native ETH or stablecoins (e.g., USDC on Karak) isolates the user's exposure. A slashing event on the restaking protocol does not affect the underlying asset's principal value or its native yield. This matters for risk-averse institutions or those using high-risk AVSs where slashing conditions are untested.
04
Non-Yield-Bearing: Broader Asset Base
Unlocks non-productive capital: Allows assets like stablecoins, bridged assets, or LP positions (e.g., via Kelp's rsETH) to secure networks. This dramatically expands the total addressable security budget for AVSs. This matters for protocols like Karak and Swell that aim to bootstrap security from DeFi's entire asset base, not just staked ETH.
HEAD-TO-HEAD COMPARISON
Risk Profile Comparison: Slashing, Depeg, and Concentration
Direct comparison of risk factors for restaking yield-bearing assets (e.g., stETH, rETH) versus non-yield-bearing assets (e.g., native ETH).
| Risk Factor | Restaking Yield-Bearing Assets (e.g., stETH) | Restaking Non-Yield-Bearing Assets (e.g., native ETH) |
|---|---|---|
Primary Slashing Vector | Protocol Slashing + Depeg Risk | Protocol Slashing Only |
Depeg Risk Exposure | ||
Concentration Risk (Top 3 AVSs) |
| ~45% |
Yield Source Dependency | Underlying LST Protocol | Native Protocol Rewards |
Liquidity Withdrawal Delay | ~1-7 days (plus queue) | ~1-7 days (queue only) |
Smart Contract Risk Layers | 2 (Restaking + LST) | 1 (Restaking) |
CHOOSE YOUR PRIORITY
Strategic Recommendations by User Persona
Restaking Yield-Bearing Assets (e.g., stETH, rETH, cbETH)
Verdict: The default choice for maximizing capital efficiency and composability. Strengths:
- Capital Multiplier: Earns base staking yield (3-5% APY) plus restaking rewards from AVSs (5-15%+ APY). This is the core value proposition of EigenLayer, Lido, and Rocket Pool.
- Deep Liquidity: Assets like stETH ($30B+ TVL) have robust secondary markets on AMMs (Curve, Balancer) and are integrated across DeFi (Aave, Compound) for leveraged strategies.
- Proven Security: The underlying LSTs are battle-tested, with mature withdrawal mechanisms and oracle networks. Considerations: Exposure to LST depeg risk and the smart contract risk of both the LST and the AVS.
Restaking Non-Yield-Bearing Assets (e.g., native ETH, stablecoins)
Verdict: A strategic hedge or entry point, but sacrifices core yield-optimization benefits. Strengths:
- Simplified Risk Profile: Avoids LST-specific risks. Direct native ETH restaking is the purest form of cryptoeconomic security for AVSs.
- Strategic Allocation: Useful for protocols (e.g., MakerDAO with DAI) or treasuries that hold large, non-yielding reserves but want to contribute to network security and earn rewards. Considerations: Forgoes the base staking yield layer, resulting in a lower total yield ceiling compared to the dual-yield model. Less composable in DeFi.
verdict
THE ANALYSIS
Verdict: The Strategic Framework for Decision Makers
A final comparison of the core trade-offs between restaking yield-bearing and non-yield-bearing assets, designed to guide strategic infrastructure decisions.
Restaking Yield-Bearing Assets (e.g., stETH, rETH, cbETH) excels at capital efficiency and composability because it allows a single asset to simultaneously earn base staking rewards and secure additional networks. For example, EigenLayer's TVL, predominantly in liquid staking tokens (LSTs), surpassed $15B, demonstrating massive demand for this model. This approach creates a powerful flywheel where yield compounds across layers, but it also concentrates systemic risk within a few large LSTs and their underlying consensus mechanisms.
Restaking Non-Yield-Bearing Assets (e.g., native ETH, stablecoins) takes a different approach by prioritizing security isolation and risk segmentation. This results in a clearer risk/reward profile, as the restaked asset's value isn't tied to the performance of a separate staking protocol. Protocols like Babylon are pioneering this for Bitcoin, and EigenLayer's upcoming native ETH restaking caters to purists. The trade-off is a direct opportunity cost, as the capital forfeits the base-layer staking yield (~3-4% APY on Ethereum) unless actively employed elsewhere.
The key trade-off: If your priority is maximizing total yield and leveraging DeFi composability within the Ethereum ecosystem, choose yield-bearing restaking via major LSTs. If you prioritize risk compartmentalization, bringing new asset classes (like Bitcoin) into restaking, or maintaining sovereign staking control, choose the non-yield-bearing path. The decision fundamentally hinges on whether you view the extra yield as worth the additional smart contract and slashing risk layered atop the base asset.
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