Crypto: Restaking Promises Yield But Delivers Only Stacked Risk And No Real...

Restaking yields come from token emissions and VC incentives, not productive activity. Complex models concentrate power among large operators, while compounding risk cascades.

Opinion by: Laura Wallendal, co-founder and CEO of Acre

Restaking is often heralded as the next big thing in decentralized finance (DeFi) yields, but behind the hype lies a precarious balancing act. Validators are stacking responsibilities and slashing risks, incentives are misaligned, and much of the $21 billion in total value locked (TVL) is held by a handful of whales and venture capitalists rather than the broader market.

Let’s break down why restaking lacks real product-market fit and how it compounds more risk than it yields. Most importantly, we need to confront the uncomfortable questions: Who profits when the system fails, and who is left holding the risk?

By definition, restaking allows already-staked assets, typically Ether (ETH), to be pledged a second time, thereby utilizing them in securing other networks or services. In this system, validators use the same collateral to validate multiple protocols, theoretically earning more rewards from a single deposit.

On paper, this sounds efficient. In practice, it’s only leverage disguised as efficiency: a financial house of mirrors where the same ETH is counted multiple times as collateral, while each protocol piles on dependencies and potential failure points.

This is a problem. Every layer of restaking compounds exposure rather than yield.

Consider a validator that restakes into three protocols. Are they earning three times the return? Or are they taking on three times the risk? While the upside usually sets the narrative, a governance failure or slashing event in any of those downstream systems can cascade upward and wipe out collateral entirely.

Additionally, the restaking design breeds a form of quiet centralization. Managing complex validator positions across multiple networks requires scale, meaning only a handful of large operators can realistically participate. Power accumulates, resulting in a small cluster of validators securing dozens of protocols and orchestrating a fragile concentration of trust in an industry purportedly built on decentralization.

There’s a good reason why major DeFi platforms and decentralized exchanges like Hyperliquid or even established lending markets aren’t relying on restaking to power their systems. Restaking has yet to prove real-world product-market fit outside speculative activ

Source: CoinTelegraph