Restaked ETH

Definition ∞ Restaked ETH refers to Ether (ETH) that has been initially staked on the Ethereum blockchain and then subsequently “restaked” through a liquid restaking protocol. This process allows staked ETH to be reused as collateral to secure other decentralized networks or protocols, thereby earning additional rewards. It amplifies the utility of staked ETH by extending its security contributions beyond the core Ethereum network. This mechanism creates a layered security model.
Context ∞ The emergence of restaked ETH has sparked significant discussion regarding capital efficiency, systemic risk, and the potential for increased yields in the decentralized finance space. Debates often focus on the security implications of reusing staked assets and the potential for cascading liquidations across interconnected protocols. Future developments will likely involve the refinement of restaking protocols and increased scrutiny of their risk profiles.