Liquid Restaking Tokens (LRTs)

What you'll learn

• What an LRT Is
• The Major LRT Protocols
• The Renzo ezETH Depeg, April 24, 2024
• Leverage Stacks on LRTs
• Other LRT Failure Modes

Key terms

LRT (Liquid Restaking Token)

A transferable token representing a share of a pooled restaking position. Examples: weETH (EtherFi), ezETH (Renzo), rsETH (Kelp), pufETH (Puffer). LRTs make restaking liquid and composable but add smart-contract and de-peg risk.

EtherFi (eETH, weETH, ETHFI)

The largest LRT protocol by sustained TVL. Non-custodial design with stakers controlling validator keys. eETH is rebasing, weETH is non-rebasing for DeFi, ETHFI is governance.

Renzo (ezETH, REZ)

LRT protocol whose ezETH token depegged sharply on April 24, 2024 after a disappointing REZ airdrop triggered points-farmer exits. The canonical LRT de-peg case study.

Kelp DAO (rsETH)

Multi-LST liquid restaking protocol; rsETH is the receipt token. Curates a portfolio of AVS exposures across multiple underlying LSTs.

Puffer (pufETH)

LRT protocol differentiated by anti-slashing hardware modules (Secure-Signer) that mechanically prevent double-signing for solo validators, reducing slashing risk for participants.

Eigenpie / Magpie

Multi-LST liquid restaking aggregator from the Magpie ecosystem. Issues per-LST receipt tokens and integrates with Pendle/Magpie yield-trading.

ezETH depeg

The April 24, 2024 event when Renzo's ezETH token traded as low as ~0.7 ETH on secondary markets following points-farmer exits and leveraged-position liquidations. Recovered to near 1:1 within days but liquidated many leveraged Aave positions in between.

Looping (LRT leverage)

Strategy of depositing LRT as collateral, borrowing ETH against it, swapping the borrowed ETH back into LRT, and repeating — amplifying both yield and risk by 3-4x typically.

Redemption-rate oracle

An LRT pricing method that values the token at its underlying redemption value rather than its secondary-market price. Lending markets using redemption oracles survived the ezETH de-peg better than those using market-price oracles.

Pendle YT (yield tokens)

Pendle Finance product that separates the yield/points component of an LRT from its principal. Allowed concentrated points exposure during 2024 LRT campaigns and drove a large share of LRT TVL.