Why L2s and Restaking are rewarding solo stakers?

Staking will remain a haven for free-spirited, open-minded capital as long as that capital maintains its bravery. Ethereum and the staking ecosystem seem eager to reward solo staking—the bravest form of staking.

Why solo staking?

Ethereum.org labels solo staking as the gold standard. Solo staking might sound as simple as making biscuits at home; however, it involves both modest (32 ETH) and significant capital from entities like Fidelity/Blackrock. These participants secure the Ethereum network through their validator nodes by updating everyone’s copy of the database and securing transactions. Solo staking is considered premium, while other forms are deemed subprime—I won’t comment further. Although abstracted versions of staking are beneficial, they don’t match the ‘gold’ status. Owning the infrastructure you stake on is unique, earning solo stakers’ rewards from L2 solutions and Eigenlayer’s restaking AVS services as a token of appreciation.

The landscape of decentralised finance (DeFi) evolves too rapidly for detailed commentary, but solo stakers receive substantial rewards from Level 2 solutions like Starknet and Omni, and through restaking for Actively Validated Services (AVS). The concept of airdrops dates back to 2016, yet the combination of these mechanisms has been particularly lucrative for our solo stakers within the Ethereum ecosystem.

Layer 2s

L2 solutions such as Optimism and Arbitrum provide a critical layer of scalability and efficiency to blockchain networks like Ethereum. By processing transactions off the main chain, L2 solutions alleviate congestion and reduce gas fees, making DeFi participation more accessible and cost-effective.

AVSs and restaking

Moreover, integrating restaking AVS introduces a potent tool for maximising staking rewards. Actively Validated Services use restaked Ethereum (ETH) to power their functionality. This strategy not only boosts the accumulation of staking rewards but also ensures dynamic and active asset management, enhancing the overall efficiency of the staking process.

Bravery

We are partnering with EigenLayer to develop native restaking nodes that operate on your infrastructure, including public cloud and bare metal. We are committed to supporting our customers in embracing this new paradigm. It’s crucial that our approach to restaking focuses on learning and experimenting rather than adopting reckless financial practices reminiscent of past crises.

I will leave you with a thought from Jeremy Goldberg: “Courage is knowing it might hurt, and doing it anyway. Stupidity is the same.” That’s why life is challenging.

Happy staking!

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