Ethereum Could Face ‘Hidden Risks’ from Redhot Restaking Market: Coinbase

“EigenLayer’s staking protocol is poised to become the bedrock for a wide range of new services and middleware on Ethereum, which, in turn, could generate a meaningful source of ether (ETH) rewards for validators in the future,” analysts David Han and David Duong wrote, noting that it is now the second largest DeFi protocol with $12.4 billion in total value locked.

EigenLayer allows validators to earn extra rewards by securing actively validated services (AVS) by restaking their staked ether and “builds upon the foundation of the existing staking ecosystem by collateralizing a diverse pool of underlying liquid staked tokens (LSTs) or native staked ETH,” the report said.