Liquid Staking and Restaking

Out the door it goes. stETH stands as collateral on Aave: the lending desk from checkpoint 10 accepts the receipt on its pawnshop counter. stETH sits in pools, working the booth business from checkpoint 8. The receipt is money now, and money finds work.

Notice what your ETH is doing: earning staking rewards inside the vault and holding down a second job outside it, backing a loan or earning pool fees. Same coin, two paychecks. This is composability in the flesh, and DeFi could not resist it.

Now the quiet part. Every borrower, pool, and protocol prefers the deepest, most integrated receipt, so the biggest issuer's paper gets more useful as it gets bigger. The snowball rolled, and today a meaningful slice of all staked ETH flows through Lido.

Named honestly, without drama: the chain's security now has a largest shareholder. Nothing broke and nobody cheated. It is simply what happens when receipts compete: the most spendable paper wins, and winning makes it more spendable still.

One more layer arrived. New networks need security too, and cannot cheaply raise their own army of stakers. The offer, function first: pledge your already staked position to also stand behind these networks, and collect additional pay. The name: restaking, and EigenLayer is the model.

Who is paying? Each network pays for security it cannot raise alone, and the staker collects twice by carrying twice the promises. The same collateral now answers to two masters, and trouble at one layer reaches through to the base. Tap each station to open it.

Stacking did not stop there. Restaking platforms issue their own receipts for restaked positions, and protocols offer yield on those. Paper on paper on paper: the goldsmith would recognize the move, and also the question that comes with it.

The board counts what the pitch will not. Your ETH sits at the bottom; every layer above it is a separate promise made by a separate machine. Time to count out loud.

Step back, and one number organizes everything. Staking pays for the least adventurous productive thing this ecosystem offers: securing the chain itself. That makes staking yield DeFi's floor, the base rate: the pay for showing up, before taking anybody else's promises.

Every yield you will ever meet gets judged against that floor. Lending, pools, restaked stacks: each should pay the floor plus something for its extra promises. Anything paying less than the floor while asking you to carry more answers Act 3's opening question badly in advance.

One test before the finish line, aimed at the obvious conclusion: same stake, same rewards, plus a receipt that walks. Surely liquid staking is strictly better than plain staking?

The board holds both side by side. Look at what the right column carries that the left never signed up for, then find the edge of this lesson's lens.

Count what you now hold: the receipt trick, the second job, the quiet snowball, the stacked promises, and the floor every yield answers to. When someone says stETH or restaking, you can see the goldsmith's paper moving behind the words.

But look at your map: receipts, pools, vaults, loans. Too many machines to hand drive. Next: the layer that drives them for you, and what the chauffeur charges for the wheel.