Native Restaking Capital Efficiency vs LRT Capital Efficiency: Utilization

Direct access to protocol rewards: Earns EigenLayer points and native token rewards (e.g., ETH staking yield) without an intermediary fee layer. This matters for large, sophisticated operators (e.g., Lido, Rocket Pool) who prioritize maximizing base yield and maintaining direct slashing risk management.

Capital is locked in a single use: Once native LSTs (e.g., stETH) are restaked on EigenLayer, they cannot be simultaneously deployed in DeFi (e.g., as collateral on Aave or in a Curve pool). This matters for protocols seeking leveraged yield strategies or needing active liquidity for their treasury.

Liquidity for DeFi Lego: Holders receive a liquid token (e.g., ezETH, Kelp's rsETH) that can be used as collateral across DeFi (e.g., MarginFi, Pendle, Aave V3). This enables recursive yield strategies and provides immediate exit liquidity, crucial for DAO treasuries and active fund managers.

Additional smart contract and centralization risk: Introduces dependency on the LRT protocol's security (e.g., Ether.fi, Renzo) and its operators. Also involves a fee layer (5-15% of EigenLayer rewards). This matters for risk-averse institutions where minimizing intermediary points of failure is paramount.

Direct access to consensus and execution layer rewards: Captures 100% of ETH staking yield and potential MEV. This matters for large, sophisticated holders (e.g., DAO treasuries, whales) who prioritize raw yield and have the technical capacity to manage validators.

Capital is locked to a single set of validators: Provides the strongest possible security guarantee for the Ethereum Beacon Chain. This is critical for foundational infrastructure like Lido's stETH, which secures ~30% of staked ETH directly on Ethereum.

Capital is freed for DeFi utilization: Holders can use LRTs (e.g., ether.fi's eETH, Renzo's ezETH) as collateral for lending on Aave, liquidity provision on Pendle, or leveraged staking. This matters for protocols and users seeking to maximize capital efficiency across multiple yield sources.

Single-token exposure to a basket of restaking strategies: Protocols like EigenLayer and Karak aggregate security across multiple AVSs. This matters for users who want passive exposure to restaking yields without managing operator selection or slashing risk directly.

Liquidity is illiquid for the duration: Staked ETH and restaked points are locked until withdrawals are enabled, creating opportunity cost. This is a major drawback for active traders or protocols needing flexible treasury management.

Introduces dependency on LRT protocol security: Users bear the smart contract risk of the LRT issuer and the solvency risk of its chosen operators. A depeg event, as seen with some early LRTs, can erode value faster than slashing.

Direct protocol rewards: Earns 100% of EigenLayer points and native staking/restaking rewards without dilution. This matters for large, long-term holders (e.g., DAO treasuries, whales) prioritizing absolute yield over liquidity.

Direct slashing risk: Capital is natively at stake, providing the highest security guarantee to actively validated services (AVS) like EigenDA or Omni Network. This is critical for protocol architects selecting node operators and building high-assurance systems.

Unlocked DeFi composability: LRTs (e.g., ether.fi's eETH, Renzo's ezETH) can be used as collateral for lending on Aave, leveraged staking on Pendle, or providing liquidity on Balancer. This matters for yield-optimizing funds and DeFi power users seeking leveraged exposure.

Zero unbonding period: Swap LRTs for ETH or stablecoins instantly on DEXs, bypassing EigenLayer's 7-day withdrawal queue. This is essential for hedge funds managing portfolio risk or retail users requiring flexible access to capital.

No intermediary layer: Interacts directly with EigenLayer smart contracts, avoiding LRT protocol fees (e.g., 10-20% commission on rewards) and smart contract risk from platforms like Kelp DAO or Swell. Optimal for institutional validators minimizing counterparty exposure.

Professional operator selection: LRT protocols (e.g., Puffer, Bedrock) automatically allocate restaked capital across a curated basket of AVSs, optimizing for risk-adjusted returns. This matters for passive restakers who lack the expertise to manually select and monitor operators.