Liquid Staking

Restaking is a complex product form after the deepening development of DeFi (decentralized finance). It is also a new type of financial derivative that appeared after the Ethereum consensus mechanism was converted to PoS. Therefore, this article will carefully walk you through the re-staking track as deeply and simply as possible by combining it with the development history of the industry. And conduct a detailed analysis of the leading project EigenLayer.

The fundamental logic of stETH is to deposit ETH into Lido. Lido utilizes these ETH to participate in Ethereum's PoS (Proof of Stake) to earn rewards, and users receive corresponding stETH as proof of their participation. Subsequently, Lido distributes the rewards to the addresses holding stETH.

ETH holders have staked over $111 billion worth of ETH, accounting for 28% of the total supply. The amount of staked ETH is also referred to as Ethereum's "security budget" because stakers could face network penalties for double-spending attacks and other violations of protocol rules. In return for maintaining Ethereum's security, stakers earn rewards through protocol issuance, priority fees, and maximum extractable value. Users can easily stake ETH through liquid staking pools without sacrificing asset liquidity, leading to a higher demand for staking than Ethereum developers anticipated. This article will outline the staking situation on Ethereum, including the types of stakers, risks and rewards associated with staking, and predictions for staking rates. It will also provide insights into proposals by developers to adjust network issuance in response to high staking demand.