Restaking promises to apply this economic game to pretty much anything, leveraging the big staking numbers on incumbent protocols to help secure upstart blockchain apps. As an investment opportunity, it’s pitched as a way to juice a bit of extra interest out of conventional staking.

EigenLayer, Ethereum's restaking leader, lets users take ETH they've staked with Ethereum and then restake it with so-called "Actively Validated Services," or AVSs. Today, that's mostly just blockchain protocols that provide support for Ethereum scaling solutions.

Proponents of the tech argue that restaking helps to improve the security of smaller blockchain apps since they might struggle to prop up their own proof-of-stake security systems, given that doing so requires substantial capital and an active community.

In an interview with CoinDesk last month, EigenLayer founder Sreeram Kannan explained how this works by using the example of 100 blockchain protocols that are each secured by $1 billion worth of stake: Imagine that "instead of each of the protocols having $1 billion separately staked, there was $100 billion commonly staked across 100 protocols," said Kannan. "To attack any one protocol, now you need $100 billion rather than needing $1 billion."

The specifics might look different on other blockchains, but the gist is the same. On Solana, for instance, users will be able to restake SOL they've staked on that network to earn extra interest and to help secure other apps.

WHAT IS LIQUID RE-STAKING

Restaking via a platform like EigenLayer typically means depositing one's ETH (or select ETH derivatives) into the protocol, spinning up an operator, and then selecting which AVSs to secure in exchange for interest.

A simpler way to stake is via liquid restaking services like Puffer, Ether.Fi and Renzo.

These are middlemen that take assets from users, deposit them into EigenLayer and equivalent platforms, and offer receipts, called "liquid restaking tokens" (LRTs), that accrue interest and can be traded in decentralized finance to earn even larger yields

The liquid restaking platforms do all of the heavy lifting of setting up operator software and selecting which AVSs to work with.

The LRTs let users easily enter and exit restaking positions, and they offer users the ability to increase their leverage by re-investing into decentralized finance protocols.

The services mirror platforms like Lido, the liquid staking behemoth on Ethereum that stakes assets on behalf of investors and offers a derivative liquid staking token, "Lido staked ETH" (stETH), that tracks the price of ETH.

StETH is hugely popular in decentralized finance, and upstart liquid restaking platforms are hoping to replicate Lido's success with their convenience-oriented LRTs.