Proof-of-stake networks pay validators to secure them. Liquid staking turns that yield into a tradeable token; restaking turns it into a marketplace where the same security can be rented to other applications. Yield on the base layer, composable.
Staking is the economic backbone of proof-of-stake Ethereum, and the LST market made it composable. Lido (Vasiliy Shapovalov, Konstantin Lomashuk) launched stETH in December 2020 and now stakes roughly 28 percent of all ETH — a number that triggers existential debates about validator concentration in every Ethereum core-dev call. Rocket Pool offers the decentralized alternative with rETH and an 8-ETH minipool model that small operators can run. Jito does the equivalent on Solana, with MEV redistribution baked into the LST. The category is huge and structurally important.
Restaking is the second-order primitive that ate 2024. Sreeram Kannan's EigenLayer launched in April 2024 and let stakers re-pledge their ETH to secure additional services — AVSs (Actively Validated Services) like EigenDA, Hyperlane, AltLayer. The design is elegant: existing trust capital, programmable slashing conditions, new revenue for stakers. The risk is that AVS slashing risks compound and a single bad AVS could cascade through restaked positions. Symbiotic and Karak are the competitors with different trust models. The space hit $20B+ TVL in months.
LRTs — Liquid Restaking Tokens — sit on top of restaking the way LSTs sit on staking. Ether.fi's eETH, Renzo's ezETH, Kelp's rsETH, Puffer's pufETH. Each abstracts AVS selection from the user and emits a tokenized claim. The points-and-airdrop economics of 2024 (pre-EIGEN airdrop) drove a meta-game where users farmed restaking points across protocols. The post-airdrop world is more sober: real yield, real slashing risk, and a question about whether AVSs generate enough fees to justify the security budget. The next year decides it.
Ethereum's economic security — the value at stake against a 51% attack — is currently committed only to securing Ethereum itself. We propose restaking: a primitive that lets stakers re-pledge their staked ETH to additional services, with additional slashing conditions specific to those services. The result is a marketplace where new protocols can rent Ethereum-grade trust without bootstrapping their own validator set.EigenLayer whitepaper →
Staking on Ethereum is a layered economy. Solo stakers run validators against 32 ETH. Liquid staking tokens unlocked the capital. Restaking layered additional services on top of that staked ETH. Liquid restaking tokens unlocked the restaked capital. MEV redistribution turned an extractive game into a yield component. Each layer adds yield and risk. The risk is structurally correlated — a slashing on the base layer cascades through everything built on top.
Solo staking is running an Ethereum validator with 32 ETH. The Beacon Chain launched December 2020; the Merge moved execution to PoS in September 2022. Validators sign attestations and propose blocks, earn issuance plus priority fees, and face slashing for double-signing or going offline for extended periods. ~3-4% annualized base yield, hardware requirements modest (a small server, decent uptime). The reference baseline against which every staking derivative is priced. Decentralization purists argue it's the only honest way to participate; capital efficiency argues otherwise.
Lido's stETH (December 2020) abstracted staking — deposit ETH, get a liquid token that accrues yield via rebase or wrapped value (wstETH). Rocket Pool's rETH (November 2021) takes a more decentralized node-operator model — operators stake their own ETH alongside delegated stake. By 2024 LSTs held a meaningful fraction of all staked ETH, with Lido's share triggering ongoing concern about validator centralization. Liquid token, captures yield, accepted as collateral across DeFi. The single most consequential primitive in Ethereum staking.
Sreeram Kannan's EigenLayer (mainnet April 2024) lets ETH (or LSTs) be restaked to secure additional services — AVSs (Actively Validated Services) like EigenDA, oracles, bridges, sidechains. Operators run AVS software; if they misbehave, the AVS slashes their restaked stake. The pitch: instead of every new service bootstrapping its own token-secured validator set, they rent Ethereum's economic security. ~$15B+ TVL within a year. The risk debate is structural: stacked slashing conditions create correlated failure modes the system hasn't been stress-tested on yet.
Liquid restaking tokens — eETH (Etherfi), ezETH (Renzo), pufETH (Puffer), rsETH (Kelp) — wrap restaked ETH into liquid, DeFi-composable tokens. Same template as LSTs one layer up: deposit ETH, get a liquid receipt that accrues base staking yield plus AVS rewards plus airdrop points. The AVS-points farming meta drove enormous LRT growth through 2024. Risks compound: validator slashing, AVS slashing, smart-contract risk, peg risk on the LRT itself. The yield stack is real; the correlated tail risk is also real.
Slashing is the cryptoeconomic mechanism that makes PoS work. A validator that double-signs blocks (proposing two competing blocks at the same slot) or surrounds a previous attestation gets a portion of stake destroyed and is forcibly exited. Penalties scale with how many other validators were slashed in the same epoch — a coordinated multi-validator attack burns far more than a single misconfigured node. ~0.5 ETH minimum, up to the full 32 ETH for correlated mass-slashings. The mechanism that makes 'cryptoeconomic security' meaningful rather than rhetorical.
Flashbots' MEV-Boost (post-Merge, 2022) lets Ethereum validators outsource block construction to specialized builders who pay the validator for the right to populate the block. The validator captures a share of the MEV that searchers extract from the block, redistributing what was previously hidden in the mempool. Jito (Solana's analog) ships block-engine auctions and a JitoSOL liquid staking token that captures MEV revenue. Restructures who profits from priority ordering — moves MEV from extractive to yield-bearing for stakers.
Conviction is stated as conviction; you decide what to do with it. Tiers below — Core, Conviction, Watch, Speculative — reflect how much of FRQNCY's attention each project currently earns, not a recommendation to buy.
KA
Conviction is theatre without practice. Five steps that turn the thesis above into something the body actually does, not just something the mind agrees with.
Run the validator client. Read the slashing conditions. Trustless staking is a real skill.
stETH, rETH, ETHx. Watch the rebase or the price. Compare to native staking. The unbond queue matters.
Pick one or two AVSs. Read each one's slashing conditions. The risk model is the product.
Spin up an EigenDA or Hyperlane operator on testnet. Feel what restaked security actually requires.
Sreeram's argument for restaking as a generalization of Ethereum's social consensus is the most important crypto-economic paper of 2023.
The Crypto hub is the index of all sectors and the freedom-technology frame they share. The Fund is what happens when the same conviction gets put to work on behalf of the network.
Validators are the economy of the chain.
Restaking generalizes that economy to anything programmable.
Slashing is the price of credibility.
Run a validator.
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