What's your opinion on DeFi restaking, and how risky is it?

[Sarionadukecom]

Hey forum mates, good day! I hope we're all enjoying the market.

I've recently started exploring DeFi—swaps, bridging, and even providing liquidity on the Cosmos chain. Finally put my TIA to use 😁. In my effort to learn more about DeFi, I came across the concept of liquid staking. While the concept is a bit unfamiliar to me, I read on Google that liquid staking is quickly becoming one of the crypto industry's biggest new investment trends, with Eigenlayer seen as a leading player, likely due to being built on the ETH chain.

I thought I'd bring this topic here so we can learn from each other. Are there any DeFi specialists here who could weigh in on the topic? What risks are associated with this concept, and what should we look out for?

[joniboini]

I believe popular crypto websites offer some insight into their risk, like this one[1]. While you should not accept everything at face value, it's worth reading and comparing those articles so you can get the idea behind liquid staking or other new terms without too much bias. I'm not sure if the trend starts with Eigen or not, but the concept is quite familiar to me even though I don't follow Eigen closely.

I believe liquid staking is just another way for a third party to attract your interest so they can hold your tokens IMO. It's similar to how you trust centralized exchange not to be malicious when you trade funds over there. Has an upside if you like risky play and want to grow your capital as long as you can accept the risk. Don't just use any random staking platform for this. Stick with on-chain staking or delegated staking if you don't want to risk your funds getting slashed or exploited. CMIIW.

[1] https://chain.link/education-hub/liquid-staking

[Sarionadukecom]

EigenLayer is actually one of the leading platforms for liquid restaking like you said but as for risks involved with liquid restaking I'm not too sure about that because I've never tried it but I have actually traded Eigenpie on Bitget just a day before which is a solid token to trade for profit but I can't offer more than that

Oh I see. I also saw that eigen is about to go live. Heard there was an airdrop.

This is EGP on Poolx. Like where you stake to farm tokens. You' know about this?

[joniboini]

This is EGP on Poolx. Like where you stake to farm tokens. You' know about this?

Yeah, Eigen was hyped because of the airdrop iirc. I'm not following their ecosystem properly but token farming is common even before liquid restaking is trending. Make sure you don't get tricked by the high APR numbers since it means nothing if the token is worthless. Are you looking for the best pool to farm/restake your token?

[KryptoBull]

Hey forum mates, good day! I hope we're all enjoying the market.

I've recently started exploring DeFi—swaps, bridging, and even providing liquidity on the Cosmos chain. Finally put my TIA to use 😁. In my effort to learn more about DeFi, I came across the concept of liquid staking. While the concept is a bit unfamiliar to me, I read on Google that liquid staking is quickly becoming one of the crypto industry's biggest new investment trends, with Eigenlayer seen as a leading player, likely due to being built on the ETH chain.

I thought I'd bring this topic here so we can learn from each other. Are there any DeFi specialists here who could weigh in on the topic? What risks are associated with this concept, and what should we look out for?

I am wary of restaking as it can artificially inflate a protocol's TVL. When an asset is staked multiple times, it creates an endless loop and renders TVL data inaccurate for assessing a protocol's health.

Restaking is also fostering unsustainable growth, similar to the issues Eigen faced with rapid capital outflows. As an investor, while I believe restaking will be a significant trend driving this DeFi uptrend, I will remain cautious and avoid restaking projects.