Kelp DAO rsETH: Liquid Restaking for Ethereum Explained

Restaking emerged as one of DeFi’s most innovative — and complex — concepts in recent years. The core idea is deceptively simple: if your staked ETH is already securing the Ethereum network, why can’t it simultaneously help secure other protocols? EigenLayer made this possible, and Kelp DAO built rsETH to make it accessible. With rsETH, you can participate in Ethereum restaking through EigenLayer while keeping your assets liquid, tradeable, and composable across DeFi — without the technical complexity of managing restaking positions directly.

What Is Restaking? The EigenLayer Foundation

Before understanding rsETH, it helps to understand restaking itself. Ethereum’s proof-of-stake system uses staked ETH as an economic stake that validators risk losing (slashing) if they misbehave. This “staked security” is valuable — it’s what makes Ethereum trustworthy.

EigenLayer extends this concept by allowing ETH stakers to opt in to also securing additional services called Actively Validated Services (AVS) — things like oracle networks, rollup sequencers, data availability layers, and more. These AVS protocols want to borrow Ethereum’s pooled security without building their own validator networks from scratch. In return, they pay restakers additional yield.

As of early 2026, EigenLayer controls approximately 93.9% of the restaking market with over $15 billion in TVL and 4.3 million ETH restaked. Current APY from EigenLayer AVS participation ranges from 3.8% to 6%, depending on which services you validate.

What Is Kelp DAO and rsETH?

Kelp DAO is a liquid restaking protocol built on EigenLayer, founded by Amitej G and Dheeraj B — the same team behind Stader Labs. Kelp DAO’s flagship product is rsETH (Kelp DAO Restaked ETH), a liquid restaking token (LRT) that represents a claim on EigenLayer deposits.

When you deposit ETH, stETH, or ETHx into Kelp DAO, you receive rsETH in return. This token earns rewards from two sources simultaneously: the underlying liquid staking yield (from Lido’s stETH or Stader’s ETHx) and additional restaking yield from EigenLayer AVS participation. Meanwhile, rsETH is freely tradeable on secondary markets — you don’t have to wait through EigenLayer’s withdrawal periods (which can span days) to access liquidity.

Supported Assets

Kelp DAO accepts multiple deposit assets:

• ETH: Direct ETH deposits, with Kelp managing the liquid staking and restaking steps
• stETH: Lido’s liquid staking token
• ETHx: Stader Labs’ liquid staking token
• rsETH: Can itself be used in certain DeFi contexts

How rsETH Generates Yield

rsETH’s multi-layered yield structure is one of its key selling points. Here’s how the rewards stack:

Layer 1: Liquid Staking Yield

The ETH deposited into Kelp DAO first earns Ethereum proof-of-stake rewards through the underlying liquid staking tokens (stETH earns ~2.4% APY, for example). This base layer reflects the fundamental Ethereum network staking yield.

Layer 2: EigenLayer Restaking Rewards

Kelp DAO restakes the pooled assets on EigenLayer, opting into AVS participation. The additional yield from EigenLayer ranges from 3.8% to 6% depending on the AVS selected and market conditions — though this layer is newer, less predictable, and carries additional risks.

Protocol Fee

Kelp DAO charges a 10% fee on restaking rewards (not on the principal). This fee is split between protocol revenue and node operators managing the restaking positions.

Multi-Chain rsETH: DeFi Composability

One of Kelp DAO’s competitive advantages is the breadth of networks where rsETH can be used. rsETH is available and usable across 10+ EVM networks, including Ethereum mainnet, Optimism, Arbitrum, Base, and others. This multi-chain presence means rsETH holders can access DeFi opportunities across the entire Ethereum ecosystem without being limited to mainnet’s higher gas costs.

Integration with major DeFi protocols allows rsETH to be used as:

• Collateral on lending protocols
• Liquidity pool assets on DEXs
• Yield optimization inputs in automated vault strategies

Risks of Liquid Restaking with rsETH

The additional yield of restaking comes with meaningful additional risks that users must understand:

Slashing Risk (Compounded)

With standard liquid staking, there’s one slashing risk: the validator backing your stETH misbehaves. With restaking, there are multiple slashing risks — the underlying liquid staking validator AND any AVS validator that uses your restaked ETH. If slashing occurs at either layer, rsETH holders bear the socialized loss.

Smart Contract Risk (Multiple Layers)

rsETH depends on multiple smart contract systems: Kelp DAO’s own contracts, EigenLayer’s contracts, and the underlying liquid staking protocol (Lido or Stader). A vulnerability in any of these systems could affect rsETH holders. All three have undergone audits (Kelp DAO by SigmaPrime, Code4rena, and MixBytes), but no system is risk-free.

AVS Counterparty Risk

AVS protocols are generally newer and less battle-tested than Ethereum itself. If an AVS protocol has a bug or is attacked, and restakers were validating it, slashing could occur. The risk profile of each AVS varies and is evolving as the ecosystem matures.

Liquidity and Peg Risk

rsETH trades on secondary markets and can trade at a discount to its underlying value during periods of market stress or reduced liquidity. Users who need immediate exit may receive less than the fair value of their underlying assets.

rsETH vs. Competing Liquid Restaking Tokens

Kelp DAO faces competition from several other liquid restaking protocols:

• EtherFi (eETH/weETH): The largest liquid restaking protocol by TVL, with its own native restaking model and additional EigenLayer integration.
• Renzo (ezETH): An EigenLayer liquid restaking protocol with multi-token deposit support.
• Puffer Finance (pufETH): Focuses on anti-slashing technology and native restaking.

Kelp DAO’s differentiation lies in its multi-chain presence and the breadth of its DeFi integrations, allowing rsETH to be used more places than competing LRTs. The auditing track record (three independent audits) and the founding team’s experience with Stader Labs provide additional credibility.

Who Is rsETH Best Suited For?

rsETH makes sense for ETH holders who:

• Already hold stETH or ETHx and want to add restaking yield without manual EigenLayer management
• Want to participate in EigenLayer’s yield opportunities while maintaining DeFi composability
• Understand and are comfortable with multi-layer slashing and smart contract risks
• Have a long-term ETH holding perspective that allows them to absorb potential short-term peg deviations

rsETH is less suitable for users who need guaranteed liquidity at all times, are risk-averse regarding smart contract exposure, or are new to DeFi and still building familiarity with liquid staking basics.

Final Thoughts

Kelp DAO’s rsETH represents an intelligent evolution of liquid staking — taking the yield-bearing, composable model pioneered by stETH and adding the additional reward layer that EigenLayer’s restaking marketplace enables. As EigenLayer’s AVS ecosystem matures and more services pay for pooled security, restaking yields could become an increasingly significant source of passive income for ETH holders.

The multi-layer risk profile makes rsETH a product for informed DeFi participants rather than casual crypto holders. But for those who understand the mechanics and are comfortable with the risk trade-offs, rsETH offers one of the most capital-efficient ways to put ETH to work in the current DeFi landscape.