- Using the DeFi protocol, stakers using Lido, Frax, Origin, and Mantle can “restake.”
According to a statement released on August 21, the decentralized finance (DeFi) system YieldNest is introducing a new liquid staking derivative (LSD) dubbed ynLSDe that is intended to collect restaking yield from EigenLayer.
According to YieldNest, the token will let Ether holders staked with Lido, FRAX, Origin Protocol, or Mantle to earn extra yield via restaking. Decentralized Ethereum staking platforms that issue their own LSDs are Lido, FRAX, Origin, and Mantle.
Restaking is the process of removing Ether tickers from the Ethereum network that have previously been staked, or lodged as collateral with a validator in exchange for rewards, and utilizing them to secure more protocols at the same time. The idea is that restaking might significantly increase returns in return for assuming more risk.
EigenLayer, an Ethereum restaking protocol that has bootstrapped almost $12 billion in total value locked (TVL) since 2023, according to data from DefiLlama, is credited with bringing restaking to prominence.
The data indicates that liquid restaking protocols, such as Puffer Finance and Ether.fi, are currently holding an additional around $11 billion in TVL.
EigenLayer is home to an expanding array of actively verified services (AVS), which use EigenLayer’s restaked ETH to secure itself. Examples of these protocols include EigenDA, eOracle, and Lagrange State Committees.
By adding stETH (Lido), sfrxETH (FRAX), mETH (Mantle), or OETH (Origin Protocol) to YieldNest’s restaking pool, users can obtain ynLSDe, according to YieldNest. ynLSDe is a tradable and liquid receipt token that represents the underlying yield-generating restaked token. The holders of ynLSDe receive a distribution of the generated restaking rewards.
According to YieldNest, receipt tokens like ynLSDe enable users to restake their assets while maintaining liquidity, allowing them to continue using their staked assets in other DeFi activities. LSDs can, however, potentially increase the hazards.
According to Mike Silagadze, CEO of liquid restaking protocol Ether.fi, the risk associated with restaking has not yet been completely defined as of August 12.
In addition to the return from staked ETH, YieldNest claims that the protocol collects yields from all possible sources for users, including EigenLayer Points, YieldNest Seeds, yields from [AVS], and even AVS Airdrops.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
