What is Restaking

Restaking is a derivative action of liquid staking and can be understood as a process of staking assets again on top of existing liquid staking, aiming to earn secondary rewards.

Restaking typically comes in two scenarios: restaking within the same protocol or restaking in another protocol.

• Restaking within the same protocol means staking the tokens and staking rewards back into the original protocol to increase future staking rewards.
• Restaking in another protocol refers to staking the tokens in a different protocol to earn rewards from that protocol and release liquidity externally.

In the second scenario, restaking allows users to earn rewards from both the original protocol and the new staking protocol. Besides releasing liquidity, restaking can also increase the value of the network, thus enhancing its decentralization and security.

In summary, restaking builds upon liquid staking, and it can fulfill:

• Liquidity Release: Staking assets such as LSD in another protocol can release liquidity.
• Compounded Rewards: Through restaking, stakers can achieve compounded returns.
• Improved Network Security: As assets are staked again, the network's value increases, leading to improved security and decentralization of the network.