Restaking increases risk rather than creating value

ImpermanentLossEnjoyer · 2026-01-24T01:28:19+00:00

Despite being seen as a promising revenue model in decentralized finance, restaking is argued to increase risk rather than generate value, as it relies on leveraging already staked assets, potentially leading to governance failures and undermining decentralization.

ImpermanentLossEnjoyer

2026-01-24 01:28:19

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Source: DigitalToday Original Title: “Staking, Increases Risks Rather Than Creating Value” Original Link:

Staking is gaining attention as a new revenue model in decentralized finance(DeFi), but it is actually being pointed out that it increases risks rather than profits.

Staking involves reusing already staked assets to earn additional rewards, but this is analyzed as acting more like simple leverage rather than efficiency. The same Ethereum(ETH) serves as collateral across multiple protocols, which only amplifies the risk.

If a governance failure or slashing event occurs in one protocol, the impact can spread to higher-level protocols, potentially causing collateral to disappear entirely. There are also concerns that only large operators can participate in managing complex validator positions, which undermines the essence of decentralization.

Staking rewards do not come from productive activities. This structure is similar to traditional financial reuse, where instead of creating real value, the same assets are repackaged. The profits mainly come from increased token issuance, venture capital liquidity incentives, and speculative fees from highly volatile native tokens. This structure is considered unsustainable and not connected to tangible economic value.

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tx_or_didn't_happen

· 01-26 23:59

Another yield trap, huh? Repeatedly staking the same ETH across multiple protocols—aren't you playing with fire? Basically, it's leveraging to chase higher returns, with all the risks on your side.

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DAOdreamer

· 01-26 21:29

Isn't this re-staking ultimately a scam... If multiple places are collateralized with the same ETH, won't everything collapse if one of them fails?

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MissedTheBoat

· 01-26 08:02

It's a leverage game after all... Using the same ETH as collateral across multiple platforms, and if one collapses, it triggers a chain reaction of failures lol --- Thinking that high staking yields are worth going all-in might lead to regret later... The risk is just too high --- Huh? But isn't this just a rehash of an old structure rather than something truly new? Feels like we're just reliving the previous financial crisis --- If one collapses, everything goes down in a structure like this, so why keep re-staking lol It's just a game of hot potato --- A nightmare where multiple protocols collapse... It's not risk diversification but risk amplification --- People currently riding this wave really don't get it... They should probably get out before things normalize

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RektHunter

· 01-26 07:23

Restaking is just a variant of putting all your eggs in one basket; it will eventually blow up.

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BearMarketSurvivor

· 01-24 01:58

Once again, this "Schrödinger-style yield," I really can't take it anymore... Using the same ETH as collateral across four or five protocols, isn't that just a nested risk?

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AirdropSweaterFan

· 01-24 01:58

Re-staking, teacher, this really seems like a trap... Since collateral is layered, once it breaks, it's a chain reaction explosion.

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SatoshiNotNakamoto

· 01-24 01:56

To be honest, restaking is just a nested doll game... Reusing the same ETH as collateral repeatedly, and when something goes wrong, everything blows up together.

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MemecoinTrader

· 01-24 01:56

nah restaking is literally just leverage wrapped in defi brrr clothing... same eth getting slashed across multiple protocols sounds like a systemic cascade waiting to happen tbh. the yield farming psyops is strong here but the math doesn't check out fr

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CryptoHistoryClass

· 01-24 01:51

ah here we go again, restaking is just leverage with extra steps dressed up in "yield farming" clothes. same eth pledged across multiple protocols? that's literally 2017 margin trading vibes but make it decentralized lmao

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