Top 3 Restaking Networks In DeFi

Protocols like EigenLayer for Ethereum, Octopus Network for NEAR Protocol, and Persistence for Cosmos, are carving out a niche in the restaking landscape.

The DeFi landscape is undergoing a transformative evolution. It is clearly the hottest narrative in the market right now. As per DeFiLlama, interest in restaking has grown exponentially over this year.

As the blockchain community delves deeper into this innovation, the spotlight falls on leading protocols like EigenLayer for Ethereum, Octopus Network for NEAR Protocol, and Persistence for Cosmos, each carving out a niche in the restaking landscape.

The Genesis of Restaking

Restaking extends the utility of staked assets to unlock unprecedented capital efficiency and bolster network security. It is an evolutionary leap from traditional staking mechanisms, allowing staked assets to be leveraged further to support additional network functionalities and rewards. 

This dual-layer utilization not only enhances the security of blockchain networks but also amplifies the potential returns for token holders, making it an attractive proposition for both investors and network participants.

Top 3 Restaking Networks

The protocols here are ranked in no particular order:

  • EigenLayer

  • Persistence One

  • Octopus Network

EigenLayer: Pioneering Restaking on Ethereum

EigenLayer leads Ethereum's restaking innovation, enhancing economic security beyond conventional staking. It allows for the reuse of staked ETH in Active Validated Services (AVS), strengthening Ethereum's ecosystem with a comprehensive security model and new yield opportunities. Protocols like Kelp DAO and Renzo Protocol within EigenLayer utilize restaked ETH to improve DeFi operations and capital efficiency.

Serving as a bridge between Ethereum's base layer and its applications, EigenLayer adopts restaking as a key feature, facilitating the use and reapplication of liquid staking tokens (LSTs). This expands the functionality of staked assets and broadens participation in network security and governance.

Native Restaking

EigenLayer's native restaking allows Ethereum validators to link their withdrawal credentials to its smart contracts, EigenPods. This innovation broadens validators' earning opportunities beyond typical Ethereum rewards, involving them in EigenLayer's ecosystem. Native restaking serves as a pathway for validators to increase their income and bolster the network's security and efficiency.

Liquid Restaking

EigenLayer developed liquid restaking to overcome the challenges of native restaking, such as security risks and high barriers to entry. This approach allows the deposit of LSTs into EigenLayer's smart contracts, making participation more accessible for Node Operators and developers. Liquid restaking offers a simplified, secure solution for users to maximize their asset utilization.

EigenLayer's combination of native and liquid restaking boosts Ethereum's security and functionality, establishing new standards for blockchain participation and rewards. This comprehensive restaking model positions EigenLayer as a key player in Ethereum's development, advancing decentralized finance and blockchain capabilities.

Persistence One: Securing Cosmos with Cross-Chain Restaking

Persistence One is leading the way in the Cosmos ecosystem by implementing restaking across its application chains, enhancing interconnected security and utility. This initiative allows for the restaking of tokens from one chain to another, bolstering the Cosmos network's economic security and fostering a more resilient and collaborative blockchain infrastructure. 

Through platforms like pSTAKE, Stride, Quicksilver, and Milkyway, Persistence One enables the redeployment of liquidity, introducing Liquid Restaking Tokens (LRTs) and Liquid Restaking Finance (LRTfi) to the Cosmos DeFi scene.

Restaking on Persistence One offers several benefits:

  • Enhanced Security: The restaking of LSTs amplifies the economic security of the Persistence Core-1 chain, reinforcing the network's overall resilience.

  • Dual Rewards System: Users benefit from a dual rewards system, earning rewards in both the native token of their staked asset and additional XPRT staking rewards.

  • Increased Utility for Cosmos LSTs: Restaking elevates the utility and value of LSTs within the Cosmos ecosystem and Persistence One.

  • Encourages Long-term Holding: The restaking mechanism incentivizes users to maintain and stake their assets longer, supporting a stable and growing liquid staking economy.

  • Cosmos LRTfi: Persistence One's restaking infrastructure enables novel use cases like Liquid Restaked Tokens and Liquid Restaking Finance for the Cosmos ecosystem, expanding the possibilities for DeFi participants.

Expanding the Total Addressable Market (TAM)

A significant aspect of Persistence One's restaking initiative is its expansive approach to the TAM for Cosmos restaking. By enabling the restaking of a wide array of assets, such as TIA, DYM, ATOM, OSMO, DYDX, INIT, and more, Persistence One sets itself apart from other ecosystems that typically focus on a single token. This diverse range of stakeable assets, all part of Cosmos' $90B market of application chains, positions Persistence One to capture a substantial market share.

This unique advantage is poised to drive significant traction and value to $XPRT, as it not only broadens the scope of assets that can be restaked but also enhances the liquidity and utility of these assets within the Cosmos ecosystem. Persistence One's commitment to innovation and its pivotal role in constructing a comprehensive restaking infrastructure underscore its influence in shaping the future of decentralized finance and blockchain utility, promising an exciting trajectory for the growth of the Cosmos ecosystem.

Persistence One's commitment to innovation and its role in building a restaking infrastructure positions it as a pivotal player in the Cosmos ecosystem, driving the future of decentralized finance and blockchain utility.

Octopus Network: Expanding NEAR Protocol's Horizons

Octopus Network introduces restaking to the NEAR Protocol, enabling $NEAR token holders to support the security of additional decentralized blockchains. This key feature of the "Octopus 2.0" upgrade aims to enhance the blockchain ecosystem's connectivity and security. Restaking boosts potential earnings for $NEAR holders and attracts appchains and middleware projects, increasing $NEAR's utility as a foundational staking asset.

Restaking also reduces the circulating supply of $NEAR, positively impacting the token's market value. Octopus Network's commitment to open web principles is showcased by making restaking a permanent, open-access feature of the NEAR protocol, encouraging broader ecosystem participation.

The network distributed 4 million $OCT tokens as rewards to users who restake their $NEAR to Ottochain, the first appchain initiated by the Octopus community. This move, inspired by Eigenlayer's approach, aims to enhance decentralized trust scalability.

For $NEAR holders, especially validators, restaking immediately multiplies earnings by validating additional entities like Octopus 2.0 appchains. It optimizes capital efficiency, provides cost-effective security for new appchains, and promotes $NEAR's use as a staking asset, fostering a balanced supply-demand relationship within the ecosystem.

The Ripple Effects of Restaking

The implications of restaking extend far beyond enhanced network security and increased capital efficiency. For the broader blockchain ecosystem, restaking represents a paradigm shift in how value and utility are perceived and utilized within networks. By enabling staked assets to serve multiple roles, restaking fosters a more vibrant and dynamic economic landscape, paving the way for new models of participation and reward distribution.

For token holders, restaking offers an opportunity to magnify their contributions and returns, engaging more deeply with the networks they support. This heightened engagement not only enriches the individual's experience but also strengthens the collective resilience and prosperity of blockchain communities.

The Future of Restaking

As innovative staking mechanisms continue to evolve and gain recognition, the blockchain industry stands on the cusp of significant transformation. Protocols such as EigenLayer, Octopus Network, and Persistence underscore the extensive capabilities of these new mechanisms in bolstering network security, operational efficiency, and system interconnectedness.

The horizon looks promising for further advancements and growth, with emerging protocols and platforms delving into the untapped potential of these novel staking concepts. As the blockchain community ventures deeper into understanding and leveraging these mechanisms, the groundwork is being laid for a future characterized by enhanced security, greater efficiency, and more collaborative ecosystems.

Join the conversation

or to participate.