Ethereum's Restaking Frenzy Ends in Profits So Low They're Almost Meaningless

The restaking gold rush in the Ethereum ecosystem has come to an end. According to recent data, top protocols are barely making a profit from restaking activities.

ether.fi, one of the largest liquid staking protocols, will cut its last structural link with EigenLayer by the end of this quarter. As of August, only 1% of assets were still being restaked due to EigenPod withdrawal credentials. ether.fi's CEO, Mike Silagadze, stated that the decision was made due to 'risk', as there were no meaningful yield opportunities in restaking.

The concept of restaking involves locking up Ethereum (ETH) to help secure the network and earning a second yield by renting out the security to other services. However, this idea never materialized, as the services buying security never paid enough to cover both the base staking yield and a premium on top.