I wrote about Eigenlayer, drawing an analogy as the AWS of the EVM eco 8 months back. Check it out if restaking is a novel concept
Since then, there’s been a lot of growth in the restaking ecosystem — other restaking infrastructure have come into the scene, as well as a number of liquid restaking providers.
Here are some updated thoughts on restaking / liquid restaking tokens (LRTs):
Restaking products sit in between an orchestration/container mgmt service like Docker and a financial institution that facilitates debt issuance
To elaborate, a protocol like Renzo will pick which AVS to delegate to (I imagine eventually there will be a protocol/on-chain equivalent of a "credit score") and interfaces with EigenLayer to orchestrate running clients on the validators
But given that this is decentralized finance, the LRT component allows any market participant to fetch a piece of the yield (and with pts programs, upside too) of this service. It also allows for all the primitive financial functions (swaps, borrow/lend) against the restaking token itself
This goes along the theme of modular blockchains ultimately allowing participants to be more specialized - stakers can show up with ETH and trust that Renzo, Etherfi, etc to do the due diligence, teams building middleware can focus on their product (and not herding validators, stakers)
Risks certainly exists but the fact that there are a number of key players here (both on the LRT platform side aka Renzo, Etherfi and on the restaking infra itself Eigen, Karak, and more to be announced) creates competition which mitigates it by keeping players honest
If we look at history aka web2 / trad real estate, web2 prior to covid was in some ways, a transfer of wealth from VCs to bay area landlords and facebook / google (online real estate aka ads). This is very much the case given that most start-ups fail (but pay a ton in office costs, online ads in the process). Will this be the case for restaking as well? If so the restaking infra (Karak, Eigen) and LRT providers (Renzo, etc) will do extremely well. Remember, narratives > reality 😉
Great write up, super interested to see how this shakes out