In-depth essays · #19 / 50 · On-Chain Finance (DeFi), Stablecoins & RWA

Liquid Staking (Lido & Rocket Pool) and Restaking (EigenLayer): Putting Staked ETH to Work

How stETH, rETH, and EigenDA unlock capital efficiency and shared cryptographic security

Native Proof-of-Stake on Ethereum requires 32 ETH and locks that capital inside the consensus layer. Liquid Staking and Restaking solved that capital lockup, growing into the largest DeFi primitives in Ethereum City.

1. Liquid Staking Tokens (LSTs): Turning Locked Stake into Composable Collateral

Protocols like Lido and Rocket Pool accept any amount of ETH from users, pool it into 32 ETH validators, and issue a liquid receipt token—stETH (or wstETH) and rETH—that accrues staking rewards while remaining freely tradable and usable as collateral in lending markets.

2. How Lido (stETH / wstETH) and Rocket Pool (rETH) Differ

Lido offers the deepest market liquidity across L1 and L2s (with wstETH wrapping rebasing stETH into an appreciating token suitable for bridges and DEXs), while Rocket Pool (rETH) emphasizes home-node decentralization by letting anyone spin up a validator minipool with a smaller ETH bond.

3. Restaking and EigenLayer: Renting Ethereum’s Economic Security to New Infrastructure

EigenLayer introduced restaking, allowing ETH stakers and LST holders to opt into additional slashing conditions to secure external middleware—such as data availability layers, bridges, and oracles—in exchange for extra yield.

4. Where Restaking Shows Up in Ethereum City: EigenDA

The flagship service secured by EigenLayer restaking is EigenDA, the high-throughput data availability layer used by Ethereum City districts Celo, MegaETH, and Ronin.

Related districts in the city

Related glossary terms

This essay is an explainer written to help you read the city; it is not investment advice. Facts on this page are as of 2026-10 and may change. If you spot a mistake, please tell us through the contact page.