Multi-chain liquid staking platform Stader Labs has launched its “Liquid Restaked Token,” known as rsETH, on testnet.
The rsETH token builds on EigenLayer’s resttaking protocol to allow users to simultaneously stake ether on multiple networks – using liquid staking tokens including Coinbase Wrapped Staked ETH (cbETH), Lido Staked ETH (stETH) and Rocket Pool ETH (rETH), to support network validation, increase security and increase rewards, a statement said.
“rsETH is more than just a token; it is an entry point to more rewards and opportunities in the crypto landscape, allowing users to collect rewards from various sources to maximize their holdings,” said Dheeraj Borra, co-founder of Stader Labs. “Additionally, rsETH offers flexibility, giving users the freedom to move or change positions while still taking advantage of DeFi rewards and boosting multiple network protocols.”
Liquid staking allows users to earn staking rewards on an underlying asset while unlocking its utility and liquidity for various DeFi applications in the form of a liquid staking derivative token.
How rETH works
Users deposit select ether liquid staking tokens (stETH, rETH or cbETH) and mint rsETH which represent fractional ownership of the underlying assets. These assets are distributed to node operators within Stader’s network, with a portion of their respective stake rewards benefiting rSETH holders.
Restakers can then trade rsETH on decentralized exchanges, use rsETH on other DeFi applications, and redeem the underlying assets at any time.
Resume challenges and criticism
Despite the introduction of rescheduling solutions, selecting node operators on different networks, complex reward structures with different tokens, high transaction fees when claiming rewards and the liquidity constraints of locked ether remain challenges and increase risks, Stader noted. It argues that rsETH addresses these issues by providing easier access to replay without the associated complexity.
EigenLayer went live on Ethereum in June with an initial deposit limit of $17 million, after raising $50 million in Series A funding in March. The total locked value of EigenLayer is now $224 millionaccording to DefiLlama.
However, the resumption sparked criticism from Ethereum co-founder Vitalik Buterin in May, noting that there are situations where it could compromise the security of the mainnet. “We should tread lightly when application layer projects aim to expand the ‘scope’ of blockchain consensus beyond the validation of essential Ethereum protocol rules,” Buterin wrote in a blog post at the time.
What’s next?
The rsETH token is live on testnet, with 632 rsETH (approximately $1 million) in deposited funds – consisting of 610 sETH and 22 rETH, according to the website. The mainnet roadmap will be announced soon, Stader Labs told The Block.
Stader’s existing multi-chain liquid staking platform has attracted a lot of attention $124 million in total value lockedAccording to data from DefiLlama, it supports networks including Ethereum, Polygon, BNB, Near, Fantom and Hedera.