The restaking narrative continues to evolve beyond its Ethereum roots, expanding into Bitcoin and Solana ecosystems. This guide explores the key protocols enabling users to maximize yield through innovative restaking mechanisms, highlighting major players, recent funding rounds, and ecosystem growth.
Understanding Restaking and Its Rapid Growth
Restaking allows users to stake their already-staked assets (like stETH or SOL) a second time to secure additional services or networks. This process helps secure new protocols while offering users extra rewards, creating a powerful "double-dip" opportunity.
The sector has seen remarkable growth and significant venture capital interest. Data shows that over 16% of all staked ETH has participated in restaking protocols like EigenLayer and Karak Network. Major funding rounds continue to fuel expansion, with several projects raising eight-figure sums throughout 2024.
Major Ethereum Restaking Protocols
EigenLayer: The Market Leader Facing Challenges
As the pioneer of the restaking concept, EigenLayer remains the sector's dominant protocol. However, its April token generation event (TGE) sparked controversy when the project announced that EIGEN tokens would initially be non-transferable.
Despite user frustration over the transfer restrictions and unexpected IP-based limitations on token claims, EigenLayer's total value locked (TVL) demonstrated resilience. The protocol's TVL grew from $14 billion in early May to a peak of $19 billion in mid-June before settling at approximately $14.9 billion.
EigenLayer supports both native restaking and liquid restaking, with 68% of assets being native ETH and 32% comprising liquid staking tokens (LSTs). The protocol currently serves approximately 161,000 restakers, though about 67.6% of assets ($10.3 billion) are delegated to just 1,500 operators.
The project has announced "major developments" planned for Q3 2024, with community speculation centered around enabling EIGEN token transfers. As of mid-July, EIGEN remains non-transferable, with over-the-counter markets pricing the token at approximately $5.39.
Symbiotic: A New Competitor Backed by Major Players
Emerging during EigenLayer's token controversy, Symbiotic entered the market with strong backing from Lido founders and Paradigm. The project officially launched in June with a $5.8 million seed round led by Paradigm and Cyber Fund.
Symbiotic distinguishes itself by supporting a wider range of assets compared to EigenLayer's ETH-centric approach. The protocol accepts any ERC-20 token for restaking, including Lido's stETH, cbETH, Ethena's ENA, and even stablecoins like USDe.
This flexibility allows crypto protocols to launch native staking for their own tokens to enhance network security. Symbiotic also offers customizable features, enabling developers to select preferred staking assets, node operators, and reward/slashing mechanisms based on their specific needs.
Supported by Lido's ecosystem, Symbiotic reached over $1 billion in TVL within its first month of operation. By mid-July, the protocol held $1.09 billion in total value locked, with Lido's wstETH comprising approximately 70% of this amount.
Major liquid restaking token (LRT) protocols including Ether.fi, Renzo, YieldNest, Swell, and Pendle Finance have already integrated with Symbiotic, allowing users to earn Symbiotic points while maintaining LRT exposure.
Mellow: A Modular LRT Built on Symbiotic
Originally a liquidity solution and Lido alliance partner, Mellow has transformed into a modular LRT infrastructure built atop Symbiotic. The platform allows anyone to create customized LRTs with varying risk/return profiles, including traditional hedge funds and staking providers.
Users can deposit ETH into Mellow, which automatically routes funds to Lido to receive stETH, then restakes these assets through Symbiotic. This process enables participants to earn both Symbiotic and Mellow platform points simultaneously.
By mid-July, Mellow had attracted $488 million in TVL and generated 37 million Symbiotic points for users.
Karak Network: Multi-Asset, Multi-Chain Restaking
Karak Network operates similarly to EigenLayer but with broader asset support and cross-chain functionality. The protocol refers to its AVS (Actively Validated Services) as Distributed Security Services (DSS) and has launched its own Layer 2 network called K2.
Unlike EigenLayer, Karak supports restaking of any asset type, including ETH, various LSTs and LRTs, and stablecoins like USDT, USDC, DAI, and USDe. The protocol has deployed across multiple chains including Ethereum, Arbitrum, BSC, Blast, and Mantle, allowing users to restake assets based on their multi-chain holdings.
Karak has surpassed $1 billion in TVL but currently restricts new deposits.
Bitcoin Restaking Protocols
Babylon: Bringing Staking to Bitcoin
Babylon introduces staking functionality to Bitcoin, enabling BTC holders to trustlessly stake their assets to secure other protocols and services. This approach allows Bitcoin security to extend to middleware, data availability layers, and sidechains while providing BTC holders with additional yield opportunities.
The protocol operates similarly to EigenLayer but requires additional technical work since Bitcoin lacks native smart contract functionality. Babylon must first make Bitcoin "stakeable" before enabling restaking capabilities.
The project has raised significant funding, including a $70 million round led by Paradigm in May 2024. Total disclosed funding now reaches $96 million, with backing from Polychain Capital, Framework Ventures, Polygon Ventures, and Binance Labs.
Users can currently test BTC staking through Babylon's Testnet4.
Lombard: Babylon-Based Liquid Restaking
Lombard functions as a liquid restaking protocol built on Babylon, similar to how Renzo operates atop EigenLayer. The project completed a $16 million seed round in July 2024 led by Polychain Capital with participation from BabylonChain, Foresight Ventures, and Mirana Ventures.
The platform issues LBTC tokens to represent BTC restaked through Babylon, enabling users to maintain liquidity while earning restaking rewards. LBTC can be utilized across DeFi protocols for lending, trading, and additional staking opportunities.
Prospective users can currently join a waitlist for testing via email registration.
Lorenzo: Another Babylon Liquid Restaking Solution
Lorenzo offers similar functionality to Lombard, allowing users to deposit BTC directly into Babylon. The platform has received support from Binance Labs and launched a pre-staking campaign in late May 2024.
Users who stake BTC through Lorenzo receive stBTC tokens and can earn both Lorenzo and Babylon points simultaneously. All BTC deposited through Lorenzo will be staked on Babylon once the protocol officially launches.
BounceBit: A Dedicated Bitcoin Restaking Chain
BounceBit represents a different approach as a dedicated BTC restaking chain rather than a protocol. The ecosystem comprises three main components: BounceBit Portal (user interface), BounceClub (CeFi/DeFi hybrid ecosystem), and BounceBit Chain (the restaking module).
The chain is secured by validators staking both bitcoin and BounceBit's native BB token. Users depositing native assets receive corresponding B-Tokens (e.g., BTC becomes BBTC), which can then be used for hybrid staking (BBTC + BB) or DeFi applications within the ecosystem.
BounceBit has completed strategic funding rounds with Binance Labs and previously raised $6 million from Blockchain Capital, Bankless Ventures, NGC Ventures, and OKX Ventures. As of mid-July, BB tokens traded at approximately $0.40 with a fully diluted valuation of $800 million.
Solana Ecosystem Restaking Protocols
Solayer: Solana's Answer to EigenLayer
Solayer brings restaking functionality to the Solana ecosystem, enabling SOL holders to stake their assets to secure various Solana-based protocols and dApps. The platform supports native SOL, mSOL, JitoSOL, and other liquid staking tokens.
The project has completed a builders round with participation from Solana Labs co-founder Anatoly Yakovenko, Solend founder Rooter, Tensor co-founder Richard Wu, and Polygon co-founder Sandeep Nailwal. Reports suggest the team is raising approximately $10 million at an $80 million valuation.
By mid-July, Solayer had surpassed $105 million in TVL, with native SOL comprising approximately 60% of deposited assets.
Cambrian: Another Solana Restaking Contender
Cambrian offers similar restaking services for SOL and LST assets within the Solana ecosystem. Founder Gennady Evstratov has indicated the team is finalizing a $2.5 million funding round at approximately a $25 million valuation.
The protocol plans to launch its restaking network, points program, and token in late Q2 or early Q3 2024. As of mid-July, no staking products were yet available to users.
Picasso: Expanding from Cross-Chain to Restaking
Originally a cross-chain protocol in the Polkadot ecosystem, Picasso expanded to offer SOL restaking services in January 2024. The platform supports SOL and various LST assets (JitoSOL, mSOL, bSOL) for securing middleware, dApps, and L2 rollups.
Despite its early start, Picasso has attracted relatively limited adoption, with only $3.75 million in restaking assets locked as of mid-July.
Frequently Asked Questions
What exactly is restaking?
Restaking allows cryptocurrency holders to stake their already-staked assets a second time to secure additional services or networks. This approach enables users to earn extra yield while helping bootstrap security for new protocols. The process typically involves locking assets in smart contracts that provide security to various actively validated services.
How does restaking differ across Ethereum, Bitcoin, and Solana?
Ethereum restaking benefits from mature smart contract capabilities and established LSD ecosystems. Bitcoin restaking requires innovative approaches since Bitcoin lacks native smart contract functionality. Solana restaking leverages the network's high throughput and low transaction costs but is earlier in development compared to Ethereum solutions.
What are the main risks associated with restaking?
Restaking introduces additional smart contract risk, potential slashing conditions across multiple services, and liquidity risks especially when using liquid restaking tokens. The technology is also relatively new, with unproven long-term security models across many protocols.
How do I choose which restaking protocol to use?
Consider factors including the protocol's track record, audit history, transparency, supported assets, and integration with established DeFi ecosystems. Also evaluate the quality of projects being secured and the clarity of reward structures. Diversification across multiple protocols can help mitigate specific protocol risks.
Can I restake the same assets on multiple protocols?
This depends on the specific assets and protocols. Some liquid restaking tokens can be deployed across multiple platforms, but native restaking typically commits assets to a single protocol. Always review each platform's terms to understand composability options and potential risks.
What's the difference between native restaking and liquid restaking?
Native restaking involves directly committing assets to secure additional services, while liquid restaking provides tokenized representations of restaked positions. Liquid restaking tokens can be used elsewhere in DeFi but may introduce additional protocol dependencies and risks.
👉 Explore advanced restaking strategies
The restaking landscape continues to evolve rapidly, with new protocols and approaches emerging across major blockchain ecosystems. While opportunities for enhanced yield exist, participants should carefully assess the risks and technical implementations of each solution before committing significant capital.