Restaking Protocol

Definition ∞ A Restaking Protocol is a decentralized application that allows users to stake existing staked assets, such as staked Ether (stETH), to secure other blockchain networks or protocols. By doing so, users can earn additional rewards while maintaining their initial staking positions. These protocols aim to enhance capital efficiency and create new incentive structures within the broader digital asset landscape.
Context ∞ Restaking protocols have emerged as a significant trend in decentralized finance, prompting considerable discussion about their potential for yield enhancement and systemic risk. News coverage often focuses on the rapid growth of assets under management (AUM) in these protocols, the new economic incentives they create, and the potential for cascading failures if underlying networks face security breaches. Analysts are closely monitoring the regulatory implications and the long-term sustainability of restaking models.