Restaking is a process where users take their staked assets, such as ETH, ETHx, stETH and stake them again to earn additional rewards. This strategy enhances the earning potential of your assets by layering staking opportunities, thus increasing the yield. Restaking allows users to maximize their returns within the decentralized finance (DeFi) ecosystem.

What is liquid restaking?

Liquid restaking is an advanced form of restaking that allows users to stake their assets without locking them up. With liquid restaking, you can stake your $ETH and still maintain liquidity, enabling the use of restaked assets for other DeFi activities. Liquid restaking provides flexibility and maximizes the utility of your assets, making it a popular choice in the DeFi space.

What are restaking rewards?

Restaking rewards are the additional earnings users receive from staking their already staked assets. These rewards come from multiple sources, including staking incentives, transaction fees, and additional yield generated by the platform. By restaking, users can compound these rewards, offering a higher return compared to traditional staking.

What is a liquid restaking token (LRT)?

A liquid restaking token (LRT) represents your staked assets in the liquid restaking ecosystem. For instance, $rsETH is Kelp DAO’s LRT for restaked $ETH. Holding $rsETH allows you to earn rewards from restaking while maintaining the ability to use your tokens across various DeFi platforms. LRTs are crucial in providing liquidity and flexibility in restaking strategies.

What is the difference between staking and restaking?

Staking: Involves locking up your assets to earn rewards. Once staked, your assets are typically illiquid until the staking period ends.

Restaking: Builds on staking by allowing users to stake their already staked assets. Liquid restaking further enhances this by keeping your assets liquid, providing flexibility to engage in other DeFi activities.

Restaking is an evolution of traditional staking, offering higher rewards and greater flexibility. By understanding and leveraging these concepts, you can maximize your yield in the DeFi ecosystem.