TL; DR
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Ethereum users can now ‘re-stake’ their existing ETH stake and earn twice the return on the same deposit.
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On the one hand it is super exciting! On the other hand, the promise of returns without money feels a bit ‘2008-esque’.
Full story
Okay, bear with us as we go through this word salad…
You can now ‘recapture’ your Ethereum, via protocols such as OwnLayerwhich use your staked ETH to secure a range of other protocols, projects and dApps.
Say it with us now: “What the hell does that mean?”
Okay, here goes nothing…
Imagine giving your bank a down payment → taking out a mortgage → buying a house → then turning around and telling your bank:
“I’m going to take it out another mortgage and purchase another house, but you’re not getting any more of my money – I’m going to use it the same deposit from the past.”
Obviously the loan servicer is more likely to kick you in the throat than accept such a deal… but in crypto, especially on the Ethereum network, this kind of dual lending is now possible.
The process goes something like this:
You stake (aka stake) your Ethereum with a transaction validator, which makes money by validating Ethereum transactions and collecting fees (giving you a share of the profits along the way).
If the validator processes fraudulent transactions, they will lose their staked Ethereum (along with yours).
Long story longer: this deployed Ethereum keeps people honest and gives everyone involved a clear financial incentive to behave.
(Much like a mortgage deposit that essentially promises, “I’ll make my repayments, or you can keep my money”).
This is where ‘resuming’ comes into play: There’s a smart new tool that allows Ethereum users to risk their staked ETH more than one validator.
The deal is: you can earn more rewards, but you increase the risk of losing everything.
At its core, retaking is a way for Ethereum to lend its security to new applications in the network (driving overall growth).
On the one hand it is super exciting! On the other hand, the promise of returns without money feels a bit ‘2008-esque’.
(We definitely need to do more research on it).