Restaking is ‘inevitable,’ but the risks are still uncertain — Ether.fi CEO
Restaking Ether will eventually become mainstream, but yields are still speculative and risks are uncertain, according to Mike Silagadze, CEO of liquid restaking protocol Ether.fi, who spoke at the Blockchain Futurist Conference on Aug. 13.
“The risk of restaking has not been fully characterized yet,” Silagadze said, adding that “there are lots of reasons to believe that it’s probably going to be fairly low.”
Restaking involves taking Ether ( ETH ) that has already been staked — posted as collateral with a validator in exchange for rewards — on the Ethereum network and using it to secure other protocols simultaneously.
EigenLayer has bootstrapped almost $13 billion in total value locked. Source: DeFiLlamaThe premise is that in exchange for taking on risk — restakers can get “slashed” if the validators for any of the networks they secure misbehave — restaking can considerably enhance rewards.
“The benefit is you’re getting more rewards,” Silagadze said. “The risk is smart contract risk, and now you could potentially be slashed by five different networks instead of just one.”
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Restaking rose to prominence after the launch of EigenLayer, a restaking protocol on Ethereum that has bootstrapped almost $13 billion in total value locked (TVL) since 2023, according to DefiLlama. Liquid restaking protocols — such as Ether.fi — host another roughly $10 billion in TVL, the data shows.
EigenLayer serves as a platform for a growing constellation of “actively validated services” (AVSs), protocols that secure themselves using restaked ETH bootstrapped by EigenLayer. Among the Largest EigenLayer AVSs are EigenDA, eOracle and Lagrange State Committees, each of which is secured by more than 2 million ETH — worth upward of $5 billion at current spot prices.
Silagadze said that for now, the value propositions of AVSs are mostly speculative, but that could eventually change:
“The yield is coming from speculation — there really isn’t any other activity right now.”
“The only way this makes sense long term is if restaking networks get customers, and those customers, directly or indirectly, pay money for the services that these other restaking networks provide,” Silagadze continued, adding that “we're probably talking years” before that happens.
“But on the flip side, I think it's inevitable,” he said.
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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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