What is Restaking?

The crypto-economic security provided by staked tokens is extended to apps on that network. On-chain applications don't need to bootstrap their security because they inherit it from the underlying chain.

However, off-chain applications like oracles and bridges don't inherit crypto-economic security. They have to bootstrap their security, which is expensive and time-consuming (launch a token, incentivize validators, attract retail investors, etc.), and often times, that security they bootstrapped is no comparison to the security of more high-profile off-chain competitors.

Restaking, as facilitated by EigenLayer and Symbiotic, extends the concept of Proof-of-Stake. By empowering users to restake assets to secure numerous additional AVS. Assets restaked to an AVS serve as collateral for its validation process, are subject to slashing, and yield additional rewards, akin to native staking. These restaked tokens become locked within the mother protocol (EigenLayer or Symbiotic).

Why is it called restaking?

It's called "restaking" because you're taking your existing staked tokens (staked to their native network) and staking them a second time to secure AVSs. Basically, you're staking twice. Of course, this increases your risk since your tokens can be slashed by two different entities (the native network and the restaking network), but it also increases your yield.

What is a Liquid Restaking Token?

Liquid Restaking Tokens represent assets that have undergone restaking on EigenLayer to safeguard AVSs. These tokens, akin to Liquid Staking Tokens (LSTs), can actively participate in decentralized finance (DeFi) markets.