How Liquid Restaking Tokens (LRTs) Work
Given that most DeFi users are not actual validators, there’s a need to provide users with the ability to access the additional yield that restaking can provide easily.
Liquid restaking projects like Kelp and Ether.Fi are built on top of Ethereum and enable users to deposit Liquid Staking Tokens (LSTs) such as stETH or rETH, which are then allocated to validators that have opted into EigenLayer’s restaking marketplace.
In return, users receive Liquid Restaking Tokens (LRTs) like rsETH, which accrue both a) Ethereum staking rewards and b) additional restaking yield while remaining liquid for DeFi use.
The above graphic illustrates that an LST is restaked to an LRT project like Kelp, which is then delegated to EigenLayer in return for restaking rewards.
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