Benefits of Restaking Protocols

Restaking protocols bridge the gap between user expectations and EigenLayer's intricate architecture. They offer several advantages:

  • Abstraction of Complexity: Users don't need to grapple with AVS selection, operator analysis, or slashing risks. Restaking platforms handle these technical details behind the scenes, allowing users to focus on their desired risk-reward profile and desired yield.

  • Amplified Security: Through diversification across multiple AVSs and operators, restaking protocols mitigate the impact of potential slashing events, adding an extra layer of protection to user funds.

  • Yield Optimization: Many protocols employ sophisticated algorithms to automatically rebalance user positions and maximize potential returns, further amplifying the benefits of participating in EigenLayer.

  • Staying Liquid: EigenLayer does not provide users with any liquid restaking token against their staked ETH. Kelp issues rsETH, issues eETH, serving as proof of the user's stake. Users can swap these tokens for other tokens on AMMs for instant liquidity or choose to redeem underlying assets through the respective contracts.

The advent of restaking protocols marks a crucial development in EigenLayer's evolution. They address the key challenges hindering its wider adoption, making it accessible, secure, and rewarding for everyone. However, the problem of the multi-step staking process and poor UX still exists. In addition to this, with the rising number of restaking platforms, a new problem has emerged. Read the next section for more details.

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