Why Restaking’s DeFi Yield Narrative Is Starting to Crack

[chainsniff]

Restaking is often pitched as the next evolution of DeFi yield, but beneath the promise of “capital efficiency” lies a growing pile of risk. By allowing already-staked assets like Ether to secure multiple protocols at once, restaking effectively reuses the same collateral across layers of responsibility.

In theory, validators earn more from a single deposit. In reality, they also stack slashing risks, governance failures, and technical dependencies. A single failure in one downstream protocol can cascade upward, potentially wiping out collateral across the entire stack. What looks like efficiency is closer to leverage—without the guardrails.

With roughly $21 billion in restaking TVL, much of it concentrated among large operators and venture-backed entities, critics argue the model quietly centralizes power while amplifying systemic fragility.

[etfs]

decentralization in theory, oligopoly in practice. restaking looks like a way for big players to rack up rewards while small stakers get excluded.