There are plenty of unconventional ways to earn in the digital‑asset market, and restaking is one of them. The popular decentralized platform EigenLayer provides the tools to make it work in practice.
Below we explain how to organize restaking on EigenLayer and what returns you can expect.
What is EigenLayer
EigenLayer is a decentralized restaking protocol in the ecosystem of Ethereum, the second‑largest cryptocurrency by market capitalization.
The project is backed by Eigen Labs, founded by researcher and entrepreneur Sreeram Kannan. His track record includes a professorship at the University of Washington and leadership of the UW Blockchain Lab.
Work on the project started in 2021, but the whitepaper was presented only in 2023.
Screenshot of the EigenLayer official website.
The EIGEN cryptocurrency
The project has a native cryptocurrency, EigenLayer (EIGEN). It is a “work” token that complements restaking. It is used to:
- Secure the system.
- Support project participants. Rewards to stakers and operators (reward programs).
- Govern the system. Coin holders take part in decisions about protocol upgrades and parameters.
EIGEN chart and information about the cryptocurrency. Source: CoinMarketCap.
At the time of writing, EIGEN ranks roughly 140th by market capitalization. The coin trades at $1.34, which is 76.2% below its all‑time high of $5.65.
Tracking EIGEN’s price is easiest on Quickex.
How restaking works and why it matters
Restaking is a concept that lets you reuse coins that are already staked. Recall that “staking” means locking cryptocurrency to support a network in exchange for rewards. In return, the user receives a pre‑agreed percentage—akin to placing money in a bank deposit.
There are many staking providers—platforms that let you lock crypto to support a network and then earn income. You can estimate staking yields using special calculators—for example, on stakingrewards.
Example: calculating the yield for staking Solana with $2,000 for 1 year on the Kiln platform. Source: stakingrewards.
Suppose you’ve already staked your coins. EigenLayer’s value proposition is to let you earn on tokens that are locked to secure the base network. Here’s how restaking works on EigenLayer:
The service allows you to reuse your staked ETH as a security “collateral” for third‑party services (Autonomous Verifiable Services, AVS). The coins are not withdrawn from base staking. This way, you can earn additional income without exposing yourself to extra risks.
Data on the amount of coins restaked via EigenLayer across three popular AVSs. Source: project website.
Restaking on EigenLayer
There are two ways to set up cryptocurrency restaking on EigenLayer. Let’s look at each.
Option 1
- Prepare an LST. If you have a “bare” token such as ETH, obtain an LST (a digital “receipt” token issued in exchange for staked coins) in your staking service.
- Connect your wallet to the EigenLayer dApp. Allow the smart contract to use your LSTs.
- Make a deposit (restake). Deposit the LST into EigenLayer. The protocol will treat it as collateral for external services.
- Delegate work to an operator. Choose an operator (node) that will do the work with AVSs.
- Confirm participation in AVSs. Select which services your collateral will connect to.
- Then—monitoring. Track rewards, your operator’s status, and any AVS rule changes. If needed, switch operators or adjust your AVS set.
Some of the operators available on EigenLayer, with stats. Source: project website.
Option 2
- Create an EigenPod (your personal smart‑contract “vault” in EigenLayer) and bind your validator’s withdrawal address. Set the validator’s withdrawal address to the EigenPod contract and register it in EigenLayer.
- Delegate work to an operator and connect AVSs. The flow is the same as in the LST option, but here your collateral is the validator itself.
- Mind slashing (the penalty for violating staking‑protocol rules). Additional AVS penalties may be withheld from future validator withdrawals.
Contrary to popular belief, on EigenLayer you can restake not only Ethereum but many other coins via their LSTs. The platform also offers basic staking services.
Some of the coins you can stake on EigenLayer.
How much you can earn from restaking on EigenLayer
The level of income depends on a number of factors. Users’ earnings are a combination of base staking payouts, EIGEN program rewards, and specific AVS payouts. Keep in mind that by default, the operator takes a 10% fee from any reward accrued.
On average, restaking alone can earn about 1–4% APY. On top of that, add staking yields (sometimes up to a couple of dozen percent) and roughly 1–2% from AVSs.
Interesting! Since August 15, 2024, the protocol has been distributing about 1.3 million EIGEN weekly to all restakers and their operators, proportional to the share of coins locked in the protocol.
EigenLayer stats. Information on the amount of value locked in the protocol. Source: DeFi Llama.
Wrapping up
Restaking not only benefits the crypto community; it also lets you set up an additional source of passive income based on coins you have already staked. EigenLayer provides the required tools.
The combination of staking + restaking + extra rewards can substantially increase your passive crypto income.
You can exchange coins earned from restaking into stablecoins at a favorable rate on Quickex.