According to a report by Coinbase, restaking has become the second largest decentralized finance (DeFi) sector on the Ethereum blockchain, with EigenLayer being the second largest DeFi protocol with $12.4 billion in total value locked. While restaking promises to be a core part of the ecosystem’s infrastructure, it could bring hidden risks compared to existing staking products. Restaking and liquid restaking tokens may pose added risks from a financial and security perspective, as LRT DAOs are incentivized to maximally restake multiple times to remain competitive. Despite these risks, Coinbase believes that restaking champions the open innovation of Ethereum and will become a core part of the ecosystem’s infrastructure.