What Is Liquid Restaking? LRTs Explained

The 30-Second Answer

Liquid restaking lets you take ETH that is already earning staking rewards and put it to work again, earning additional yield from restaking protocols like EigenLayer.

You receive a liquid restaking token (LRT) that represents your restaked position and can be used elsewhere in DeFi. It is staking on top of staking, with a tradeable token that keeps your capital liquid.

The approach is simple, instead of earning 3% from ETH staking alone, liquid restaking can add another 2% to 5% on top from restaking rewards.

The trade-off is additional layers of smart contract risk, potential slashing exposure, and the complexity of understanding what your token actually represents.

From Staking to Liquid Staking to Liquid Restaking

To understand liquid restaking, it helps to trace the evolution. ETH staking was introduced with Ethereum's move to proof-of-stake. Users lock 32 ETH to run a validator and earn network rewards.

The problem: that ETH is locked and cannot be used for anything else while it is staked.

Liquid staking protocols like Lido solved this by letting users stake any amount of ETH and receive a liquid token (stETH) in return. That stETH represents the staked position and accrues rewards over time. Furthermore, it can also be traded, used as collateral in lending protocols, or deposited into liquidity pools. Liquid staking unlocked billions of dollars of previously idle capital.

Liquid restaking takes this one step further. Protocols like EigenLayer allow staked ETH (or liquid staking tokens like stETH) to be "restaked" to secure additional networks and services called Actively Validated Services (AVSs).

In return, restakers earn rewards from those services on top of their base staking yield. Liquid restaking tokens (LRTs) make this process accessible by handling the restaking mechanics and issuing a tradeable token that represents the full position.

How EigenLayer Enables Restaking

EigenLayer is the protocol that dominated restaking on Ethereum. It allows ETH stakers to opt in to securing additional protocols beyond just the Ethereum network. These additional protocols (AVSs) pay for the security they receive, creating a new source of yield for restakers.

The core idea is that Ethereum's massive staking base ($50 billion+) represents an enormous pool of economic security. Instead of every new protocol bootstrapping its own validator set from scratch, they can rent security from Ethereum's existing stakers via EigenLayer.

Restakers earn rewards from these AVSs, and the AVSs get robust security without needing to build it independently.

EigenLayer's TVL has grown to approximately $15 billion, making it one of the largest protocols in DeFi. The restaking rewards vary depending on which AVSs are active and how much total stake is allocated to each.

As the AVS ecosystem matures, the yield opportunities are expected to diversify and stabilise.

The Biggest LRTs in 2026

eETH (ether.fi) is the largest liquid restaking token by TVL. Ether.fi handles the restaking process through EigenLayer and issues eETH, which earns both base ETH staking rewards and restaking rewards.

It has attracted significant institutional and retail capital due to its early mover advantage and comprehensive integration across DeFi.

rsETH (Kelp DAO) aggregates restaking across multiple operators and AVSs. Kelp DAO experienced a significant security incident in April 2026 (approximately $293 million), which highlighted the real risks in the restaking stack.

The incident affected user trust and reminded them that LRT protocols add smart contract layers on top of already complex staking infrastructure.

ezETH (Renzo) offers a similar restaking wrapper with its own approach to operator selection and AVS allocation.

pufETH (Puffer Finance) differentiates through anti-slashing technology designed to reduce validator penalties.

swETH (Swell) combines liquid staking with restaking in a single product.

Each LRT makes different design choices around operator selection, risk management, and reward distribution.

The Yield Stack: Base ETH Plus Restaking Rewards

An LRT position typically earns from three sources. The base layer is Ethereum staking rewards (currently around 3% APY), which come from network validation.

The second layer is restaking rewards from AVSs secured via EigenLayer, which vary but generally add 2% to 5% depending on the specific AVSs and overall restaking demand.

Some LRTs offer a third layer through protocol-specific token incentives or points programmes.

The combined yield makes LRTs attractive compared to plain ETH staking or even traditional liquid staking tokens. However, each additional yield layer comes with additional risk.

The base staking yield is relatively predictable. Restaking rewards depend on AVS demand and can fluctuate. Token incentives are often temporary and may not persist.

Users should evaluate the yield breakdown carefully.

An LRT advertising 8% APY where 5% comes from unsustainable token emissions is very different from one earning 5% where most of it comes from organic staking and AVS rewards.

The sustainability of each yield source matters more than the headline number.

Risks: Slashing Cascades, Smart Contract Layers, and Concentration

Liquid restaking introduces risks that do not exist in plain staking or even liquid staking. Understanding these risks is essential before committing capital.

Slashing cascade risk is the most discussed concern. If a restaked validator misbehaves or an AVS experiences a fault, the validator's stake can be slashed (partially or fully forfeited).

Because restaked ETH secures multiple services simultaneously, a slashing event on one AVS could affect the same stake that secures other AVSs.

In theory, a cascading series of slashing events could significantly reduce the value of an LRT position.

Smart contract layer risk compounds with each protocol in the stack. An LRT position typically involves the Ethereum staking contract, the liquid staking protocol (like Lido), EigenLayer's restaking contracts, the LRT protocol's own contracts, and potentially the AVS contracts.

A vulnerability in any single layer can affect the entire position. The Kelp DAO incident demonstrated that this is not a theoretical concern.

Reward concentration risk exists because the restaking rewards depend on a relatively small and evolving set of AVSs. If the major AVSs reduce their reward rates, shift to different security models, or experience problems, LRT yields could compress significantly.

The restaking ecosystem is still early, and the long-term reward sustainability is unproven.

Depeg risk means the LRT may trade below the value of the underlying ETH during market stress. If many holders try to exit simultaneously, the LRT price on secondary markets can drop below its redemption value.

Redemption queues and withdrawal delays can exacerbate this, as users who cannot redeem quickly may sell at a discount.

How to Enter an LRT Position via Portals

Portals.fi simplifies entering LRT positions by aggregating across multiple protocols in a single transaction.

Rather than manually staking ETH, then restaking through EigenLayer, then minting an LRT, users can go from any token on any supported chain to an LRT position in one step.

The process works through Portals' standard swap interface. Select your source token (ETH, USDC, or any supported asset), select the LRT you want to enter (eETH, rsETH, ezETH, etc.), and Portals routes the transaction through the optimal path.

This handles all the intermediate steps automatically, including any necessary swaps or cross-chain transfers.

Use Portals Explorer to compare LRT yields, underlying protocol TVL, and available routes before entering a position. Comparing multiple LRTs side by side helps identify which offers the best risk-adjusted return for your situation.

Frequently Asked Questions

Is liquid restaking safe?
Liquid restaking carries more risk than plain ETH staking or traditional liquid staking because it adds additional smart contract layers and slashing exposure.

The Kelp DAO exploit in April 2026 showed that these risks are real. Users should diversify across LRT providers and only allocate capital they can afford to lose.

What is the difference between liquid staking and liquid restaking?
Liquid staking (e.g., Lido's stETH) stakes ETH to secure Ethereum and gives you a liquid token.

Liquid restaking takes that a step further by restaking the ETH through EigenLayer to also secure additional protocols (AVSs), earning extra yield. The LRT represents the full restaked position.

Can I lose my ETH through restaking?
Yes, through slashing. If a restaked validator violates protocol rules or an AVS triggers a slashing condition, a portion of the staked ETH can be permanently forfeited.

The probability and severity depend on the specific validator operators and AVSs involved.

Well-run operators with anti-slashing technology reduce but do not eliminate this risk.

How do I choose between different LRTs?
Key factors include the protocol's track record, audit history, TVL stability, yield composition (organic vs incentivised), operator selection criteria, and how transparently they communicate risks.

Diversifying across multiple LRTs rather than concentrating in one reduces single-protocol risk.

Do I need to understand EigenLayer to use LRTs?
No. LRT protocols abstract away the EigenLayer mechanics. You deposit ETH (or another token) and receive the LRT; the protocol handles operator selection, AVS allocation, and reward distribution.

However, understanding the basics helps you evaluate the risks you are taking on.

Explore LRT Positions with Portals

Enter any LRT position in one click via Portals Explorer. Compare yields across eETH, rsETH, ezETH, and more, with no sign-up required.

Visit portals.fi to get started.

This article is for informational purposes only and does not constitute financial advice. Liquid restaking carries inherent risks including slashing, smart contract vulnerabilities, depeg risk, and reward variability.

Historical data and yield figures are approximate and may change. Always conduct your own research before interacting with any protocol. For our full disclaimer, please visit disclaimer.