Key Takeaways
One year and $20B later, restaking has solidified itself as a new DeFi primitive, harnessing and extending Ethereum’s cryptoeconomic security. Liquid Restaking and Vault Receipt Tokens (LRTs and VRTs) have unlocked opportunities to put staked tokens to work, transforming idle capital into active participants in DeFi. The result is a more composable and efficient way to use and build value onchain.
Lots of capital is locked on restaking platforms, but what’s next? With EigenLayer kicking off the slashing rollout with their recent announcement, those engaged in restaking will need to be much more risk aware. A deeper understanding of restaking risk will likely come with additional benefits, with AVS yields likely coming live to compensate users for their new risk.
As with any groundbreaking innovation, our first instinct is to establish frameworks and models that illuminate its opportunities and risks. Driving this effort is a commitment to deep research and developing tools that track the evolution of risk and untangle market complexities.
Over the past year, we dove into restaking, publishing peer-reviewed restaking research, hosting Restaking Day to unite leading experts, launching an LRT Risk Dashboard, and so much more — all in the service of advancing the understanding of restaking and its potential.
Partnerships
We collaborated with leading restaking protocols and LRTs, leveraging our experience in modeling and research analysis to inform critical decisions and develop sustainable approaches to restaking. We also worked with Aera, a non-custodial treasury management protocol, to facilitate restaking rewards management.
- LRTs: Puffer (Mainnet), Swell (Mainnet) — We provided recommendations on AVS allocation and rewards management (through Aera).
- VRTs: Fragmetric (Solana) — We began working on Solana-based restaking and advised Frametric on NCN allocation.
- Protocols: We collaborated with EigenLayer as an ecosystem and research partner and with Babylon, focusing on cap performance, research, and the protocol’s next phases.
Dashboards
LRT Risk Dashboard: In collaboration with the Eigen Foundation, we built a real-time dashboard to visualize LRT risk. Our dashboard covers leading LRTs, including ether.fi’s weETH, Kelp’s rsETH, Renzo’s ezETH, Puffer’s pufETH, and Swell’s rswETH. The dashboard tracks slippage, LP concentration, withdrawals, onchain liquidity, and more.
Governance
We’ve positioned ourselves as a governance partner in the restaking ecosystem. Thus far, we fulfilled governance roles in Jito, EigenLayer, and Swell. We continue to extend our collaborations, actively participating in the co-authorship and publication of JIP-12 with the Jito Foundation and providing public feedback on key Eigenlayer proposals.
Research
Our growing restaking team collaborated across the org to establish Gauntlet as a leading voice in restaking research. We developed frameworks illuminating AVS allocation strategies, assessed LRT market risk, and analyzed the impact of the growing number of collateral assets.
- AVS Selection Framework: We lay out a mathematical framework for approaching AVS selection, which will ultimately drive better capital efficiency.
- Liquid Restaking Token (LRT) Market Risk Framework: We provide a framework for evaluating LRT market risk, focusing on four main risk attributes: external liquidity, withdrawals, LRT volatility, and DeFi risk.
- Optimizing AVS Allocations for Liquid Restaking Tokens: We explore various options for EtherFi’s AVS allocation strategy and determine how it may impact its yield accrual.
- How Much Should You Pay for Restaking Security? Our model shows that an adversary with a strictly submodular profit combined with strategic node operators who respond to incentives can avoid large-scale cascading failures.
- Restaking Collateral Health: We suggest a comprehensive framework for evaluating collateral health in the context of restaking protocols and AVSs. An AVS’s economic security is associated with the price stability of its collateral, since a drop in the collateral’s market value can create profitable attacks to corrupt the AVS.
- Staking Stablecoins — Assessing the Economic Security of Stablecoin Collateral in Restaking: We examine the role of stablecoins in restaking. As more (re)staking platforms support staking with arbitrary ERC-20s, stablecoins are becoming a viable means for providing economic security for new networks such as AVSs.
Presentations and Events
Our team spoke at events across the globe to present our novel research. At EthCC in Brussels, we hosted Restaking Day, which brought together thought leaders to explore the restaking landscape.
- Liquid Restaking Token Overview: LRTs are a transformational innovation but present novel manifestations of risk. In this presentation we provide an overview of LRTs and discuss the development of secondary markets and AVS selection.
- Categorizing Liquid Restaking Token Risks: Here, we define LRTs and categorize their various dimensions of risk.
- Restaking Flow and Implications on Services: In this presentation, we explore how shared security layers facilitate restake to secure secondary services and assess how supporting multiple marketplaces may reduce risk.
- Not All Restaking Tokens Are Equal: We need a framework to evaluate restaked collateral. This presentation breaks down the importance of reduced price volatility and steady stake balance in restaking.
- How Much Security Does Your AVS Really Need? Here, we explore steps that AVSs can take to ensure overall network security, including choosing a local rewards budget and rebalancing efficiently.
Blogs
While research often forms the basis of our work, examining any innovation from a wider lens offers context. We published a couple of blogs that explored the restaking landscape.
Stay tuned for much more on restaking from us in 2025!
Blog
View the full presentation
Read the full paper
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