@d314785e

How does volatility of restaking yields compare to ETH staking? The volatility of restaking yields is significantly higher than that of native ETH staking. ETH staking yield is primarily a function of network issuance and total stake, which are relatively stable and predictable variables. In contrast, restaking yield is an aggregate of rewards from multiple, often nascent, AVSs. These rewards are driven by the supply-and-demand dynamics for security and the individual performance of each AVS's service, which can be highly variable. The introduction of "points" and airdrop farming further adds speculative volatility, causing yields to spike with new AVS launches and plummet if anticipated airdrops disappoint. Therefore, while restaking offers a higher potential return, it comes with a fundamentally different and more volatile risk-return profile, more akin to a volatile DeFi yield than to a baseline staking return.

0 reply

0 recast

0 reaction