Lido, the decentralized liquid staking platform, is ramping up its offerings with the introduction of 'Restaking Vaults' in collaboration with Mellow Finance and Symbiotic. This new offering gives stETH holders a chance to dip their feet into one of crypto’s hottest areas: Ethereum restaking.

Understanding Restaking

Traditional liquid staking on Ethereum involves locking up ETH to validate transactions and uphold the network's security. In return, platforms like Lido provide a Liquid Staking Token (LST) that signifies the staked ETH along with an additional yield, typically around 3% annual percentage yield (APY).

Restaking builds on this concept by using LST tokens to further secure validator nodes operating on various platforms, including layer 2 solutions and oracles. In exchange, users receive a Liquid Restaking Token (LRT), which represents their restaked ETH. Essentially, restaking amplifies the utility of LSTs, offering additional earning potential.

Lido's new initiative allows stETH holders to restake their assets across four distinct vaults, each meticulously curated to maximize returns through tailored strategies. These vaults enhance stETH's productivity, yielding additional profits and rewards for users.

Lido, the largest DeFi protocol by total value locked (TVL), managing an impressive $33 billion, has established itself as a dominant Ethereum staking product. Its liquid staked token, stETH, ranks as the sixth largest asset in the cryptocurrency market.

The concept of restaking is gaining traction within the broader crypto industry, driven by platforms like EigenLayer. EigenLayer pioneered the restaking model, allowing stakers to secure additional blockchain networks and applications, thereby maximizing yield.

This model is rapidly being adopted by other DeFi projects aiming to enhance user engagement and returns.