Skip to main content

How EigenLayer + Liquid Restaking Are Re‑pricing DeFi Yields in 2025

· 9 min read
Dora Noda
Dora Noda
Software Engineer

For months, "restaking" was the hottest narrative in crypto, a story fueled by points, airdrops, and the promise of compounded yield. But narratives don't pay the bills. In 2025, the story has been replaced by something far more tangible: a functioning economic system with real cash flows, real risks, and a completely new way to price yield on-chain.

With key infrastructure like slashing now live and fee-generating services hitting their stride, the restaking ecosystem has finally matured. The hype cycle of 2024 has given way to the underwriting cycle of 2025. This is the moment where we move from chasing points to pricing risk.

Here’s the TL;DR on the state of play:

  • Restaking moved from narrative to cash flow. With slashing live on mainnet as of April 17, 2025, and the Rewards v2 governance framework in place, EigenLayer’s yield mechanics now include enforceable downside, clearer operator incentives, and increasingly fee-driven rewards.
  • Data availability got cheaper and faster. EigenDA, a major Actively Validated Service (AVS), slashed its prices by approximately 10x in 2024 and is on a path toward massive throughput. This is a big deal for the rollups that will actually pay AVSs and the operators securing them.
  • Liquid Restaking Tokens (LRTs) make the stack accessible, but add new risks. Protocols like Ether.fi (weETH), Renzo (ezETH), and Kelp DAO (rsETH) offer liquidity and convenience, but they also introduce new vectors for smart contract failures, operator selection risk, and market peg instability. We’ve already seen real depeg events, a stark reminder of these layered risks.

1) The 2025 Yield Stack: From Base Staking to AVS Fees​

At its core, the concept is simple. Ethereum staking gives you a base yield for securing the network. Restaking, pioneered by EigenLayer, allows you to take that same staked capital (ETH or Liquid Staking Tokens) and extend its security to other third-party services, known as Actively Validated Services (AVSs). These can be anything from data availability layers and oracles to cross-chain bridges and specialized coprocessors. In return for this "borrowed" security, AVSs pay fees to the node operators and, ultimately, to the restakers who underwrite their operations. EigenLayer calls this a “marketplace for trust.”

In 2025, this marketplace matured significantly:

  • Slashing is in production. AVSs can now define and enforce conditions to penalize misbehaving node operators. This turns the abstract promise of security into a concrete economic guarantee. With slashing, "points" are replaced by enforceable risk/reward calculations.
  • Rewards v2 formalizes how rewards and fee distributions flow through the system. This governance-approved change brings much-needed clarity, aligning incentives between AVSs that need security, operators that provide it, and restakers who fund it.
  • Redistribution has started rolling out. This mechanism determines how slashed funds are handled, clarifying how losses and clawbacks are socialized across the system.

Why it matters: Once AVSs begin to generate real revenue and the penalties for misbehavior are credible, restaked yield becomes a legitimate economic product, not just a marketing story. The activation of slashing in April was the inflection point, completing the original vision for a system already securing billions in assets across dozens of live AVSs.

2) DA as a Revenue Engine: EigenDA’s Price/Performance Curve​

If rollups are the primary customers for cryptoeconomic security, then data availability (DA) is where the near-term revenue lives. EigenDA, EigenLayer's flagship AVS, is the perfect case study.

  • Pricing: In August 2024, EigenDA announced a dramatic price cut of roughly 10x and introduced a free tier. This move makes it economically viable for more applications and rollups to post their data, directly increasing the potential fee flow to the operators and restakers securing the service.
  • Throughput: The project is on a clear trajectory for massive scale. While its mainnet currently supports around 10 MB/s, the public roadmap targets over 100 MB/s as the operator set expands. This signals that both capacity and economics are trending in the right direction for sustainable fee generation.

Takeaway: The combination of cheaper DA services and credible slashing creates a clear runway for AVSs to generate sustainable revenue from fees rather than relying on inflationary token emissions.

3) AVS, Evolving: From “Actively Validated” to “Autonomous Verifiable”​

You may notice a subtle but important shift in terminology. AVSs are increasingly described not just as “Actively Validated Services” but as “Autonomous Verifiable Services.” This change in language emphasizes systems that can prove their correct behavior cryptographically and enforce consequences automatically, rather than simply being monitored. This framing pairs perfectly with the new reality of live slashing and programmatic operator selection, pointing to a future of more robust and trust-minimized infrastructure.

4) How You Participate​

For the average DeFi user or institution, there are three common ways to engage with the restaking ecosystem, each with distinct trade-offs.

  • Native restaking

    • How it works: You restake your native ETH (or other approved assets) directly on EigenLayer and delegate to an operator of your choice.
    • Pros: You have maximum control over your operator selection and which AVSs you are securing.
    • Cons: This approach comes with operational overhead and requires you to do your own due diligence on operators. You shoulder all the selection risk yourself.

  • LST → EigenLayer (Liquid restaking without a new token)

    • How it works: You take your existing Liquid Staking Tokens (LSTs) like stETH, rETH, or cbETH and deposit them into EigenLayer strategies.
    • Pros: You can reuse your existing LSTs, keeping your exposure relatively simple and building on a familiar asset.
    • Cons: You are stacking protocol risks. A failure in the underlying LST, EigenLayer, or the AVSs you secure could result in losses.

  • LRTs (Liquid Restaking Tokens)

    • How it works: Protocols issue tokens like weETH (wrapping eETH), ezETH, and rsETH that bundle the entire restaking process—delegation, operator management, and AVS selection—into a single, liquid token you can use across DeFi.
    • Pros: The primary benefits are convenience and liquidity.
    • Cons: This convenience comes with added layers of risk, including the LRT's own smart contracts and the peg risk of the token on secondary markets. The depeg of ezETH in April 2024, which triggered a cascade of liquidations, serves as a real-world reminder that LRTs are leveraged exposures to multiple interconnected systems.

5) Risk, Repriced​

Restaking’s promise is higher yield for performing real work. Its risks are now equally real.

  • Slashing & policy risk: Slashing is live, and AVSs can define custom, and sometimes complex, conditions for penalties. It is critical to understand the quality of the operator set you are exposed to and how disputes or appeals are handled.
  • Peg & liquidity risk in LRTs: Secondary markets can be volatile. As we've already seen, sharp dislocations between an LRT and its underlying assets can and do happen. You must build in buffers for liquidity crunches and conservative collateral factors when using LRTs in other DeFi protocols.
  • Smart-contract & strategy risk: You are stacking multiple smart contracts on top of each other (LST/LRT + EigenLayer + AVSs). The quality of audits and the power of governance over protocol upgrades are paramount.
  • Throughput/economics risk: AVS fees are not guaranteed; they depend entirely on usage. While DA price cuts are a positive catalyst, sustained demand from rollups and other applications is the ultimate engine of restaking yield.

6) A Simple Framework to Value Restaked Yield​

With these dynamics in play, you can now think about the expected return on restaking as a simple stack:

Expected Return=(Base Staking Yield)+(AVS Fees)−(Expected Slashing Loss)−(Frictions)\text{Expected Return} = (\text{Base Staking Yield}) + (\text{AVS Fees}) - (\text{Expected Slashing Loss}) - (\text{Frictions})

Let's break that down:

  • Base staking yield: The standard return from securing Ethereum.
  • AVS fees: The additional yield paid by AVSs, weighted by your specific operator and AVS allocation.
  • Expected slashing loss: This is the crucial new variable. You can estimate it as: probability of a slashable event × penalty size × your exposure.
  • Frictions: These include protocol fees, operator fees, and any liquidity haircuts or peg discounts if you are using an LRT.

You will never have perfect inputs for this formula, but forcing yourself to estimate the slashing term, even conservatively, will keep your portfolio honest. The introduction of Rewards v2 and Redistribution makes this calculation far less abstract than it was a year ago.

7) Playbooks for 2025 Allocators​

  • Conservative

    • Prefer native restaking or direct LST restaking strategies.
    • Delegate only to diversified, high-uptime operators with transparent, well-documented AVS security policies.
    • Focus on AVSs with clear, understandable fee models, such as those providing data availability or core infrastructure services.

  • Balanced

    • Use a mix of direct LST restaking and select LRTs that have deep liquidity and transparent disclosures about their operator sets.
    • Cap your exposure to any single LRT protocol and actively monitor peg spreads and on-chain liquidity conditions.

  • Aggressive

    • Utilize LRT-heavy baskets to maximize liquidity and target smaller, potentially higher-growth AVSs or newer operator sets for higher upside.
    • Explicitly budget for potential slashing or depeg events. Avoid using leverage on top of LRTs unless you have thoroughly modeled the impact of a significant depeg.

8) What to Watch Next​

  • AVS revenue turn-on: Which services are actually generating meaningful fee revenue? Keep an eye on DA-adjacent and core infrastructure AVSs, as they are likely to lead the pack.
  • Operator stratification: Over the next two to three quarters, slashing and the Rewards v2 framework should begin to separate best-in-class operators from the rest. Performance and reliability will become key differentiators.
  • The "Autonomous Verifiable" trend: Watch for AVS designs that lean more heavily on cryptographic proofs and automated enforcement. These are likely to be the most robust and fee-worthy services in the long run.

9) A Note on Numbers (and Why They’ll Change)​

You will encounter different throughput and TVL figures across various sources and dates. For instance, EigenDA's own site may reference both its current mainnet support of around 10 MB/s and its future roadmap targeting 100+ MB/s. This reflects the dynamic nature of a system that is constantly evolving as operator sets grow and software improves. Always check the dates and context of any data before anchoring your financial models to it.

Bottom Line​

2024 was the hype cycle. 2025 is the underwriting cycle. With slashing live and AVS fee models becoming more compelling, restaking yields are finally becoming priceable—and therefore, truly investable. For sophisticated DeFi users and institutional treasuries willing to do the homework on operators, AVSs, and LRT liquidity, restaking has evolved from a promising narrative into a core component of the on-chain economy.

This article is for informational purposes only and is not financial advice.

Share on Twitter