Liquid Staking Tokens provided a tremendous innovation for DeFi, the ability to use a block-reward-earning token in day-to-day activity on-chain. The term "Restaking" refers to any protocol that allows holders to earn more rewards by staking LSTs again.
Ecosystems like realized that restaking could be used to help extend Ethereum's security to other services. Thus, EigenLayer created a way for new services to use the pooled cryptoeconomic security provided by LSTs to power a new market of Actively Validated Services (AVSs). These services have the advantage of not having to bootstrap their own trust networks. Products such as and have emerged to capture the interest in restaking. These and other similar protocols allocate assets called Liquid Restaking Tokens (LRTs) that represent the underlying ETH stake + rewards + any rewards that may accrue from Eigenlayer via restaking. Liquid Restaking is just getting started and will extend far beyond EigenLayer. Restaking tokens are typically restaked multiple times to earn rewards. This practice allows users to simultaneously accrue points from multiple LRT protocols at the same time based on one underlying LST holding. Users accrue points in the hope of participating in a protocol reward. Liquid Restaking Tokens carry their own risks associated with slashing and other events that could lead to the devaluation/depegging of the asset. AVSs may not provide any yield at all, users should do their own research before buying any LRT asset.
