A liquid restaking token (LRT) is a tradable receipt for restaked collateral that earns base staking rewards plus operator fees from every service the collateral secures. Its yield is a composite rate, not a single number, and it carries the combined slashing risk of every service it backs.
An LRT's yield is a weighted average of several rates that shifts as services come and go. Quoting the highest plausible composite APY as if it were guaranteed is the recurring failure.
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How it works
An LRT is issued by a restaking protocol in exchange for deposited collateral, usually an LST or native staked ETH. The holder earns the base staking yield of that collateral plus operator fees from each actively validated service the protocol secures. Unlike an LST, whose return is a single staking rate, the LRT's return changes as services are added, modified, or lost from the portfolio.
How it is calculated
The base rate comes from the underlying staked asset. The incremental rate is the sum of operator fees from each AVS, weighted by the collateral allocated to it. Secure three services with different fees and allocations, and the LRT yield is the weighted average of four rates: the base plus three service-specific rates. That composite nature makes the yield higher in expectation and harder to audit than a simple staking rate.
Design consequence
The risk is composite too. Each AVS sets its own slashing conditions, so an LRT can face base-chain slashing and every AVS's rules at once. One operator running misconfigured nodes across services can trigger several slashing events in a single incident.
Picture an LRT backed by staked ETH restaked into two oracle AVSs and one bridge AVS. An operator failure could trigger an Ethereum slashing event while a liveness failure on an oracle service triggers that AVS's penalty, compounding losses in a way neither standalone disclosure would predict.
How we approach it
Honest LRT disclosure is a range, not a headline. State a confirmed base rate from verifiable staking, then a fee projection for each service that is clearly labeled a projection and marked against actual live status. LRT marketing too often leads with the yield of every service the protocol hopes to onboard, including ones that are not live.
See LRT Tokenomics Guide for how this applies in practice.
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