Top LRT Protocols Rewrite Their Playbooks as Restaking Yields Fade
Liquid restaking, once pitched as Ethereum’s yield engine, is losing its economic edge. PANews reports that ether.fi, long seen as the category leader, said on Sept. 29 that it will spin off its restaking business by the end of the quarter and fully pivot to a crypto neobank. CEO Mike Silagadze said restaking no longer offers meaningful yield opportunities and still carries material security risk. As of Sept. 30, the entire liquid restaking market held about $1.45 billion in total value locked, yet generated only about $100,000 in protocol revenue over the prior week. That squeeze is pushing the sector’s biggest players into new business lines. Kelp is shifting from selling restaking yield to offering short-term settlement liquidity through products such as Gain and the not-yet-launched KUSD. Renzo has rebranded as Renzo Finance and is repositioning itself as an on-chain structured yield platform. Swell shut down its Swellchain Layer 2 and redirected resources to Faro, a non-custodial AI trading app on Hyperliquid. Puffer is moving deeper into Ethereum execution infrastructure with Preconf and UniFi Based Rollup, while Bedrock is rebuilding its yield thesis around Bitcoin rather than Ethereum. Across these moves, the common thread is clear: LRT is being recast from a standalone product into a capital entry layer for higher-margin asset management, trading, and infrastructure services.
