Ethereum's proof-of-stake transition in September 2022 created over 30 million ETH staked by validators, representing approximately ₹2.5 lakh crore in economic security. According to reports from EigenLayer, this staked capital sits idle for other protocols that need decentralized validation. Restaking proposes a solution where stakers commit their ETH to Ethereum's consensus while simultaneously securing additional protocols through EigenLayer. The same capital backs multiple protocols simultaneously, eliminating the need for each new protocol to build independent security infrastructure.
As reported by EigenLayer, the system operates through three distinct roles: restakers who deposit staked ETH or liquid staking tokens like stETH into EigenLayer contracts and delegate to operators, operators who run validation software for actively validated services (AVSs) and receive delegated stake, and actively validated services that use restaked ETH for their security requirements. The flow involves restakers depositing stETH into EigenLayer, delegating to operators, operators opting into AVSs, running validation software, and restakers earning additional rewards from AVSs on top of base Ethereum staking yields. Operators face slashing if they violate AVS rules, with EigenLayer's contracts enforcing delegation and slashing logic.
According to EigenLayer, over 20 AVSs had launched by mid-2026, with EigenDA processing the highest volume. Key categories include oracle networks that use restaked ETH as security bonds instead of separate tokens, cross-chain bridges providing economic deterrents against fraudulent attestations, keeper networks requiring off-chain computation, and coprocessors for verifiable results like ZK proof generation. The first and largest AVS is EigenDA, a data availability layer built by EigenLayer's team that processes transaction data for multiple L2 rollups. By mid-2026, EigenDA was providing an alternative to Celestia and Ethereum's native blob space.
As reported by EigenLayer, major liquid restaking protocols include Ether.fi (eETH) as the largest by TVL, Renzo (ezETH) which abstracts EigenLayer delegation, Puffer (pufETH) focusing on solo validator participation, and Kelp (rsETH) providing diversified restaking exposure. These protocols create tradable tokens representing restaked positions, adding another layer of smart contract risk to the stack. At its peak, EigenLayer held over ₹1.25 lakh crore in restaked assets, making it one of the largest DeFi protocols by total value locked. Aggregate yields of 5% to 7% on ETH drew significant capital during 2024 and 2025.
According to EigenLayer, restaking introduces compounding risks where each additional percentage point of yield comes with corresponding increased exposure. The system faces Ethereum consensus slashing for double-signing or faults, AVS slashing from multiple protocols with independent slashing rules, correlated slashing where infrastructure failures across multiple AVSs can trigger simultaneous slashes, and smart contract risks in AVS slashing contracts that are newer and less battle-tested than Ethereum's consensus penalties. Systemic risks include potential cascading liquidations if large-scale slashing events affect major operators, while operator selection determines risk profiles with professional operators typically offering better infrastructure and lower concentration risk than solo operators.
