The risks of LRTs

The article, by Mike Neuder and Tarun Chitra, argues that liquid restaking tokens (LRTs) carry substantial risk and that there is no free lunch, since the extra rewards come with added exposure. It compares six yield-bearing instruments across five attributes, pairing sovereign bonds, L1 staking positions and AVS restaking positions with bond funds, liquid staking tokens (LSTs) and LRTs. The authors state that LRT TVL grew from $250 million to over $4 billion in the past two months, ahead of the launch of restaked services. They also note that EigenLayer launched in June 2023 and that Lido holds over 30% of staked ETH.