Rebooking is ‘inevitable’, but the risks are still uncertain – Ether.fi CEO

Restocking Ether will eventually become mainstream, but the product is still speculative and risks are uncertain, according to Mike Silagadze, CEO of liquid restaking protocol Ether.fi, who spoke at the Blockchain Futurist Conference on August 13.

“The risk of regrouping has not yet been fully determined, and there are many reasons to believe it will probably be very low,” Silagaze said.

Rescheduling involves taking previously staked Ether (ETH) – escrow with a validator in exchange for a reward – on the Ethereum network and using other protocols to secure it at the same time.

The premise is that instead of facing risk – if retransmitters behave in a verifiable misbehavior for any networks – retransmissions can increase rewards.

“The advantage is that they are getting a lot of awards,” Silagaze said. “The risk is smart contract risk, and now they can be lost on not just one, but five different networks.

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It has regained popularity after the launch of EigenLayer, a storability protocol on Ethereum that has a total value locked (TVL) of nearly $13 billion as of 2023, Defillama said. Liquidity rebalancing protocols like Ether.fi will handle another $10 billion in TVL, the data shows.

EigenLayer serves as a platform for a growing constellation of “actively authenticated services” (AVSs) that secure themselves using ETH bootstrapped by EigenLayer's repositories. Among the largest EigenLayer AVSs are EigenDA, eOracle and Lagrange State Committees, each with more than 2 million ETH in collateral – worth more than $5 billion at the current spot price.

For now, value propositions for AVSs are largely speculative, Silagaze said, but that could eventually change:

“Production comes from speculation – there really isn't any other activity at the moment.

“The only way this makes sense long-term is if the re-networks get customers and their customers pay directly or indirectly for the services these other re-networks provide,” Silagazze continued, adding, “We're probably talking years.” Before this happens.

“But on the flip side, I think it's inevitable,” he said.

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