New way to make crypto passive income is a game changer!
Tags: cryptocurrency, tutorial, startup
Published: 2023-10-19 03:35:47

The ever-evolving world of cryptocurrencies has been pivotal in introducing new avenues for investors to generate passive income. From mining to staking and yield farming, these innovative methods may not require some routine measures for earning, such as bank interests, stocks, bonds, or real estate investment. This blog post will shed light on a new trend rapidly emerging in the crypto space that could be of significant interest to you.

## Cashing-In Early

Early adopters often encounter considerable incentives. For instance, Bitcoin miners and participants in yield farming in the early stages made incredible gains due to being early birds. However, it’s not just about making money but also about the transformative shift in technology that can reshape what we can do with blockchains. And restaking is one such opportunity.

## What is Restaking?

Unlike the conventional methods of earning passive income, such as yield farming, mining, or staking, restaking brings in a more efficient approach. In these typical methods, you utilize your computational resources or money for one specific task at a time. However, restaking enables you to use your computational resources (like running an Ethereum node) and your cryptocurrencies (like the 32 Ether) to simultaneously participate in multiple decentralized processes that require your assets and computing power.

In other words, instead of putting your money or computational resources in one place at a time, you can have multiple incomes from different places at the same time. That's exactly what restaking is all about.

Consider earning a 5% return from restaking on Ethereum; you can simultaneously participate in other blockchain protocols and accumulate more returns on your investment reaching a potential maximum of 500%. With a solution like this, the upside potential is immense with fewer risks involved compared to other methods in crypto space.

## Becoming Part of Restaking with Eigen Layer

A project that's stimulating this process across the crypto space is Eigen Layer, which already has over $250 million in total value locked (TVL). To begin your journey, visit the Eigen Layer website and click on "restake now," which directs you to the application part of the site.

Now, there are two paths here: Native Restaking and Liquid Restaking.

* Native Restaking involves you running a complete Ethereum node, dedicating your 32 Ether, and creating an Eigen pod to participate.
    
* However, if you don't possess 32 ether or running a validator seems intensive, Liquid Restaking is your option. You can use liquid staking tokens provided by services like Rocket Pool, Lido, or Coinbase for participation.
    

For Liquid Restaking, you simply deposit Ether into their smart contracts. In return, these services give you tokens representing your stake while these provided platforms run a validator. You can then use these tokens to join Eigen layer.

## Weighing the Benefits and Risks

The major advantage of restaking lies in its reduced leverage requirements. You can multiply your staked cryptocurrency in multiple places without leveraging like staking or yield farming. However, with restaking, the risks of getting liquidated due to sudden drops in the principal value of the cryptocurrency or fluctuations in borrowing interest rates are substantially lower.

While restaking certainly seems promising, it's never devoid of risks. These include:

* Risks of self-funding, phishing attacks, or smart contract glitches remain present just like in any other blockchain venture.
    
* Greater slashing risks: If you're not performing satisfactorily in any participating protocol, slashing risks, i.e., loss of staked cryptocurrencies, multiply for each protocol.
    
* Strain on Ethereum protocol: Overstuffing Ethereum's consensus mechanism with multiple protocols can pose risks, as mentioned by Ethereum's creator Vitalik Buterin in a blog post.
    

## Onwards To Blockchain Mastery

While the direction of restaking still lies in the realm of speculation, the substantial potential it brings shouldn't be overlooked. The journey might have bumps, but the prospects for enormous return on investments hold strong, especially if cryptocurrencies witness a significant wave of a bull market in forthcoming months.

If you’re excited about the possibilities and opportunities that blockchain and the restaking era have to offer, your journey to becoming a blockchain wizard can begin today. Just remember that the inherent risks in this venture should not be ignored. Still, with solid knowledge of blockchain technology and a clear understanding of effective strategies, your step towards commanding control of the crypto space could be right around the corner. Happy trading!

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Plug into the restaking eraStart your journey in the crypto spaceMitigate risks and amplify your returns
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*Disclaimer: Nothing in this blog post constitutes financial advice. You must exercise caution when using new techno*