Restaking Boom Fades as Ethereum Protocols Struggle to Generate Profits
Key Takeaways
- •Ether.fi plans to remove its remaining structural ties to EigenLayer by the end of 2026, with less than 1% of its assets still restaked as of August 2026.
- •DefiLlama data shows the restaking sector held about $10.02 billion in assets but generated only $99,977 in weekly fees, compared with $27.35 million in fees for liquid staking on $51.87 billion in assets.
- •The five largest liquid-restaking protocols outside ether.fi—Renzo, Kelp, Swell, Puffer Finance and Bedrock—earned a combined $953,350 in gross profit in the second quarter of 2026, down from $2.18 million three quarters earlier.
- •EigenLayer's assets peaked at $19.7 billion during the 2024 boom, when liquid-restaking tokens grew more than 1,000% in the first six weeks of the year.
- •The underlying technology remains operational, with EigenDA active and Symbiotic expanding integrations, but the sector has yet to generate enough revenue to offset the added complexity and slashing risk.
The restaking boom that drove billions of dollars into Ethereum-based protocols is losing momentum, as declining yields and rising risks undermine the economics that fueled the sector's rapid growth.
Ether.fi, one of the sector's largest Ethereum liquid-restaking platforms, plans to remove its remaining structural ties to EigenLayer, the protocol that pioneered restaking on Ethereum, by the end of 2026, with less than 1% of its assets still restaked as of August 2026. Chief executive Mike Silagadze said the decision reflected the lack of meaningful additional yield and the risks associated with restaking.
Restaking allows staked Ether to be used to secure additional blockchain services, theoretically generating an extra return for depositors. The model's premise was that the same pool of staked Ether could secure multiple services at once, multiplying the yield a single deposit could earn. In practice, the economics have weakened sharply as incentives have declined, while slashing — penalties for misbehaviour that can cost operators a portion of the funds they steward — has introduced a more tangible risk.
Fees Lag as the Sector Shrinks
DefiLlama data illustrates the gap between restaking and its larger counterpart, liquid staking — the older model in which deposits are represented by tokens that can be traded or deployed elsewhere in DeFi while the underlying Ether remains staked. The restaking sector held about $10.02 billion in assets on September 8, 2026, and generated $99,977 fees during the preceding week, according to DefiLlama. By comparison, liquid staking held $51.87 billion and generated $27.35 million in fees over the same period. Measured against liquid staking, restaking held roughly one-fifth of the assets but produced well under one-hundredth of the fees.
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The five largest remaining liquid-restaking protocols outside ether.fi — Renzo, Kelp, Swell, Puffer Finance and Bedrock — generated a combined $953,350 in gross profit in the second quarter of 2026, down from $2.18 million three quarters earlier.
The figures suggest that the restaking layer itself has struggled to produce sustainable economics. On Kelp's books, for example, EIGEN token rewards were recorded as both revenue and cost of revenue, meaning the rewards passed directly to depositors without generating any gross profit for the protocol itself.
From Breakneck Growth to Retreat
The pullback marks a sharp reversal for a sector that expanded rapidly in 2024. The prospect of additional returns on top of staked Ether drew billions in deposits: EigenLayer's assets peaked at $19.7 billion, while liquid-restaking tokens grew more than 1,000% during the first six weeks of 2024.
As the additional yield disappeared, some capital rotated toward other DeFi structures, including curated lending vaults — a model that allows users to deploy stablecoins and other assets into pools managed by third-party curators.
For ether.fi, the response has been to diversify beyond staking. The company is building out a broader crypto financial-services business, including a neobank, as restaking becomes less central to its model. The pivot mirrors a broader repositioning across a sector whose founding promise of extra yield has faded.
Technology Works; the Economics Remain the Question
The underlying technology continues to operate. EigenLayer's data-availability service, EigenDA, remains active, while rival Symbiotic has expanded its network integrations.
The challenge for restaking is therefore less about whether the technology works than whether the additional security it provides generates enough revenue to compensate users and protocols for the added complexity and risk. On current figures, the sector has yet to find that balance. The end of 2026 provides a concrete marker: by then, ether.fi plans to have removed its remaining structural ties to EigenLayer, and the sector's weekly fee and quarterly profit reports will show how the remaining protocols are holding up.
Source: BitcoinKE
