Native Restaking excels at providing direct, unmediated security by leveraging Ethereum's validator set through EigenLayer. This creates a strong, cryptoeconomic security floor, as slashing is applied directly to the validator's staked ETH. For example, an AVS like EigenDA or eoracle can bootstrap security by attracting over $15B in restaked ETH, creating a formidable cost-of-attack barrier without needing its own token.
LABS
Comparisons
Native Restaking vs Liquid Restaking
A technical comparison for CTOs and protocol architects on the core trade-offs between directly staking native ETH into an AVS versus using a liquid staking token as collateral, focusing on security source, liquidity, and composability.
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introduction
THE ANALYSIS
Introduction: The Core Dilemma in AVS Security
Choosing between Native and Liquid Restaking for securing your AVS is a foundational decision that dictates your protocol's security model, capital efficiency, and operational complexity.
Liquid Restaking takes a different approach by tokenizing the restaking position into Liquid Restaking Tokens (LRTs) like ether.fi's weETH or Kelp's rsETH. This strategy unlocks liquidity for restakers but introduces a delegation layer. This results in a trade-off: while it dramatically improves capital efficiency and user adoption (with LRT protocols collectively securing billions in TVL), it adds complexity to the slashing and reward distribution mechanisms, creating an indirect security link.
The key trade-off: If your priority is maximizing direct security guarantees and minimizing trust assumptions for a critical infrastructure AVS, choose Native Restaking. If you prioritize rapidly scaling your AVS's Total Value Secured (TVS) by tapping into a broad, liquidity-seeking capital base, choose Liquid Restaking.
tldr-summary
Native Restaking vs Liquid Restaking
TL;DR: Key Differentiators at a Glance
A direct comparison of core trade-offs for protocol architects and engineering leads.
01
Native Restaking: Security Simplicity
Direct EigenLayer integration: Stake ETH directly to secure Actively Validated Services (AVS) like EigenDA or Omni Network. This eliminates intermediary risk and smart contract complexity, providing the most direct path to Ethereum-aligned security. This matters for protocols prioritizing maximum security guarantees and minimal dependency layers.
02
Native Restaking: Capital Efficiency
Zero opportunity cost on principal: Your staked ETH earns base Ethereum staking rewards and AVS rewards simultaneously without dilution. There is no secondary token minting, avoiding the depeg risk associated with liquid staking tokens (LSTs). This matters for large, long-term stakers (e.g., DAO treasuries) who value principal preservation above liquidity.
03
Liquid Restaking: Capital Liquidity
Unlock DeFi composability: Protocols like Ether.fi (eETH) and Renzo (ezETH) mint a liquid restaking token (LRT) representing your restaked position. This token can be used as collateral across DeFi (Aave, Curve, Pendle) for leveraged yield strategies. This matters for active treasury managers and yield farmers seeking to maximize capital utility.
04
Liquid Restaking: AVS Diversification
Automated yield aggregation: LRT protocols act as a restaking manager, automatically allocating your stake across a basket of AVSs (e.g., AltLayer, EigenDA, Lagrange). This provides built-in diversification and optimizes reward accrual without manual operator selection. This matters for passive restakers who want a hands-off, diversified exposure to the restaking ecosystem.
HEAD-TO-HEAD COMPARISON
Native Restaking vs Liquid Restaking
Direct comparison of core technical and economic trade-offs for protocol security and capital efficiency.
| Metric | Native Restaking (EigenLayer) | Liquid Restaking (Ether.fi, Kelp DAO) |
|---|---|---|
Capital Efficiency (Yield Source) | Solo staking yield + AVS rewards | Solo staking yield + AVS rewards + LST yield |
Liquidity Provision | ||
Slashing Risk Exposure | Direct to validator | Indirect via LST/LRT token |
Exit Timeline (Unstaking) | ~7 days + queue | < 24 hours (via secondary market) |
Protocol Integration Complexity | High (direct smart contract integration) | Low (use standard LST/LRT token) |
Average Total TVL (as of Q1 2024) | $15B+ | $8B+ |
Key AVS Examples | EigenDA, AltLayer | EigenDA, Omni Network |
pros-cons-a
PROS AND CONS
Native Restaking vs Liquid Restaking
A technical breakdown of the core trade-offs between direct EigenLayer restaking and using liquid restaking tokens (LRTs).
01
Native Restaking: Key Strength
Maximum Security & Direct Rewards: You interact directly with the EigenLayer smart contracts, eliminating intermediary risk. This provides the highest possible yield from EigenLayer points and native ETH staking rewards, with no protocol fees. This matters for large, security-first institutions (e.g., DAO treasuries, custodians) managing >1,000 ETH.
02
Native Restaking: Key Weakness
Capital Illiquidity & Operational Overhead: Your staked ETH is locked and non-transferable. Exiting requires a 7-day withdrawal queue, and you must manually manage operator delegation and AVS (Actively Validated Service) strategy. This matters for protocols needing flexible capital (e.g., DeFi treasuries) or users who cannot monitor slashing conditions.
03
Liquid Restaking: Key Strength
Capital Efficiency & Composability: You receive a liquid token (e.g., ether.fi's eETH, Renzo's ezETH, Kelp's rsETH) representing your restaked position. This token can be used as collateral across DeFi (Aave, Maker, Pendle) for leveraged yields. This matters for yield-optimizing protocols and users who require 24/7 liquidity without sacrificing restaking rewards.
04
Liquid Restaking: Key Weakness
Smart Contract & Depeg Risk: You introduce additional layers of smart contract risk from the LRT protocol and its operator set management. You also bear the risk of your LRT trading at a discount (depeg) to its underlying NAV, as seen with early ezETH volatility. This matters for risk-averse stakers and those who prioritize the simplicity of Ethereum's base layer security.
pros-cons-b
PROS AND CONS
Native Restaking vs Liquid Restaking
Key strengths and trade-offs at a glance for CTOs and architects evaluating security models and capital efficiency.
01
Native Restaking: Maximal Security
Direct slashing and rewards: Validators are slashed directly on the Beacon Chain, and rewards are native ETH. This matters for protocols like EigenLayer where Actively Validated Services (AVSs) require the strongest cryptoeconomic security guarantees.
02
Native Restaking: Protocol Simplicity
No secondary token risk: Eliminates exposure to de-pegging or liquidity issues of liquid restaking tokens (LRTs). This matters for large, risk-averse institutions managing $500K+ staking operations who prioritize custody simplicity and direct chain interaction.
03
Native Restaking: Capital Lockup
Illiquid stake: Staked ETH and restaked points are locked and non-transferable. This is a major trade-off for protocols needing flexible treasury management or users seeking leverage, as seen in Rocket Pool's rETH model for contrast.
04
Native Restaking: High Barrier to Exit
Unstaking delays: Exiting a validator and withdrawing restaked positions involves Beacon Chain queue delays (days to weeks). This matters for operators needing agility, compared to the instant liquidity provided by LRTs on DEXs like Uniswap or Curve.
05
Liquid Restaking: Capital Efficiency
Composability with DeFi: LRTs (e.g., ether.fi's eETH, Renzo's ezETH) can be used as collateral in lending markets like Aave, for liquidity provisioning, or in yield strategies. This unlocks 2-10x more utility from staked capital versus idle, native stake.
06
Liquid Restaking: Accessibility & Liquidity
Instant entry/exit: Users can mint/burn LRTs without validator hardware or unbonding periods, accessing a $10B+ Total Value Locked (TVL) market. This matters for funds and DAOs that require portfolio rebalancing speed, similar to trading Lido's stETH.
07
Liquid Restaking: Protocol Risk
Smart contract & de-peg exposure: LRTs add layers of smart contract risk from minters (e.g., Kelp DAO, Puffer) and reliance on oracle prices. This is a critical trade-off for security-focused architects, introducing vectors not present in native restaking.
08
Liquid Restaking: Yield Dilution
Fee stacking: LRT protocols often take a cut (5-15%) of AVS rewards, and underlying DeFi strategies have their own fees. This can erode net yield compared to direct native restaking, a key calculation for maximizing returns on large positions.
CHOOSE YOUR PRIORITY
Decision Framework: Choose Based on Your Use Case
Native Restaking for Architects
Verdict: The default choice for security-first, protocol-native integrations. Strengths: Direct integration with Ethereum's consensus via EigenLayer offers the highest security guarantees and slashing enforceability. It provides a pure, non-diluted trust model for building Actively Validated Services (AVS) like AltLayer, Omni Network, or EigenDA. You maintain full control over the economic security of your network. Considerations: Requires deep integration work and locks capital into a single, illiquid stake. Bootstrapping a new AVS can be slower as you must attract native ETH stakers directly.
Liquid Restaking for Architects
Verdict: Ideal for rapid bootstrapping and composability-focused ecosystems. Strengths: Platforms like EigenLayer (via LSTs), Renzo (ezETH), and Kelp DAO (rsETH) abstract away staker acquisition. You tap into a large, liquid pool of restaked ETH from day one, significantly accelerating AVS launch. The liquid restaking token (LRT) can be integrated into your protocol's DeFi lego (e.g., as collateral). Considerations: Introduces an additional trust layer in the LRT provider and their oracle/strategy management. Security is shared and potentially diluted across many AVS, depending on the provider's allocation model.
risk-profile
Native Restaking vs Liquid Restaking
Risk Profile Comparison
Key strengths and trade-offs at a glance. Choose based on your protocol's risk tolerance and operational needs.
01
Native Restaking: Lower Systemic Risk
Direct slashing exposure: Validators are slashed directly by the consensus layer (e.g., Ethereum). This eliminates intermediary risk from LST protocols like Lido or Rocket Pool. This matters for institutional validators who prioritize minimizing third-party dependencies and want a direct line of sight to penalty enforcement.
02
Native Restaking: Simpler Security Model
No additional smart contract risk: Security is bounded by the underlying chain's consensus and the restaking contract (e.g., EigenLayer). Avoids risks from LST token economics, oracle failures, or governance attacks prevalent in protocols like Stader or Swell. This matters for protocol architects building critical infrastructure where attack surface minimization is paramount.
03
Liquid Restaking: Capital Efficiency & Liquidity
Unlocked TVL for DeFi: LSTs like stETH or rETH can be restaked via platforms like EigenLayer or Kelp DAO, then used as collateral in Aave, Compound, or for liquidity provisioning. This matters for DeFi-native teams and treasury managers who cannot afford locked, illiquid capital and need to maximize yield across multiple venues.
04
Liquid Restaking: Diversified Validator Exposure
Risk distribution across node operators: By using an LST, you inherit the risk profile of a decentralized set of operators (e.g., 30+ in Rocket Pool's network). This mitigates the impact of a single validator's slashing event. This matters for smaller stakers and funds seeking to avoid the concentration risk of running their own validator infrastructure.
05
Native Restaking: Predictable Cost Structure
Fixed operational costs: Costs are primarily hardware, bandwidth, and the native gas fees for restaking transactions. Avoids variable fees from LST protocols (e.g., 5-10% commission) and potential premium/discount volatility of LST tokens on secondary markets. This matters for CTOs with fixed budgets requiring predictable OpEx for long-term runway planning.
06
Liquid Restaking: Composability & Speed
Rapid deployment and exit: Acquire LSTs instantly from a DEX (e.g., Uniswap) and deposit into a restaking pool like Renzo or EtherFi in minutes. Exit by selling the liquid restaking token (LRT). This matters for hedge funds and agile protocols that need to adjust their restaking exposure quickly in response to market conditions or new AVS launches.
verdict
THE ANALYSIS
Final Verdict and Strategic Recommendation
A strategic breakdown of the core trade-offs between native and liquid restaking to guide infrastructure decisions.
Native Restaking excels at security and protocol alignment because it directly extends Ethereum's cryptoeconomic security to a specific set of services, like EigenLayer's Actively Validated Services (AVS). For example, a protocol like AltLayer can leverage this native stake to bootstrap its decentralized sequencer set with over $15B in underlying economic security, creating a powerful trust network without fragmenting liquidity. This direct link minimizes systemic complexity and smart contract risk, offering a purer security model for core infrastructure.
Liquid Restaking Tokens (LRTs) take a different approach by abstracting complexity and maximizing capital efficiency. Protocols like Ether.fi, Renzo, and Kelp DAO issue a liquid token (e.g., eETH, ezETH) that represents a user's restaked position. This results in a trade-off: it unlocks composability for DeFi (enabling use as collateral in Aave or for liquidity provision), but introduces an additional layer of smart contract risk and potential points farming dilution. The LRT ecosystem has rapidly grown to command over $10B in TVL, demonstrating massive demand for this liquid wrapper model.
The key architectural divergence is between unified security and fragmented liquidity. Native restaking creates a deep, dedicated security pool for a select few AVSs, while LRTs distribute that security across a broader, more competitive landscape of AVSs but in a more liquid form. This leads to different risk profiles: native stakers bear the slashing risk of their chosen AVS directly, while LRT holders are exposed to the aggregate performance and operator selection of the LRT protocol's strategy.
The final strategic choice is clear. Consider Native Restaking if your priority is maximizing the cryptoeconomic security and sybil-resistance for a critical, high-value protocol component where capital lock-up is acceptable. Choose Liquid Restaking when you require flexible, composable capital that can participate in multiple AVSs simultaneously and be leveraged across the broader DeFi ecosystem on Ethereum and Layer 2s like Arbitrum and Optimism.
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