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description: A simple approach to protocol and innovation
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# Nektar Network & Liquid (Re)Staking

<figure><img src="https://898315414-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F0jBxWtQKEcPWOBbvzFp3%2Fuploads%2FphtYbhADRZIoCzupxqha%2Fblack%20on%20white%20bg.png?alt=media&#x26;token=3e63109b-9498-449e-a7a1-42a807f3c7c3" alt=""><figcaption></figcaption></figure>

#### No time to relax

It seemed that Liquid Staking (LST) protocols had brought an innovation that would take several months to capture liquidity in Etheruem and thus strengthen the use and efficiency of Ethereum staked tokens. With more than 25% of ETH in circulation in stake, the network is still far from the blocking percentages managed by other networks, which are in a range of 50% to 70% of their staked token volume.

<figure><img src="https://898315414-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F0jBxWtQKEcPWOBbvzFp3%2Fuploads%2FCmaQXdIKbtMHOhcGG457%2Fimage.png?alt=media&#x26;token=890e2fc0-36d7-4471-8e86-5be4a740af4e" alt=""><figcaption><p>Source: <a href="https://www.stakingrewards.com/assets/proof-of-stake?sort=staking_marketcap&#x26;timeframe=1y&#x26;order=desc&#x26;byChange=false">Staking Rewards</a> - Change % 1y</p></figcaption></figure>

> Liquid Staking (LST) protocols allow the user to benefit from the profitability that staking offers without losing the ability to use a derivative of their locked token in other DeFi (Decentralized Finance) markets.

The volume that Liquid Staking protocols have been able to absorb until April 2024 is approximately 11.5m ETH. This represents just over 36% of the total Ethereum staking volume (31.7m).

<figure><img src="https://898315414-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F0jBxWtQKEcPWOBbvzFp3%2Fuploads%2Fp8WKckBVQHu4eFQdMFDY%2FCaptura%20de%20pantalla%202024-04-22%20110443.png?alt=media&#x26;token=f3a4aed3-8eb4-4dda-8541-a135d594f77b" alt=""><figcaption><p>Source: <a href="https://www.stakingrewards.com/asset/ethereum-2-0">Staking Rewards</a></p></figcaption></figure>

In a type of product that still has a long history and adoption capacity (LST protocols), one would expect some stability while the foundations are laid. But this is going very fast, and [EigenLayer](https://www.eigenlayer.xyz/)launched a new concept: Liquid ReStaking (LRT), capable of absorbing 4.39m in ETH token deposits in just 4 months and **before launching on the mainnet**.

<figure><img src="https://898315414-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F0jBxWtQKEcPWOBbvzFp3%2Fuploads%2F22k5vnvuwkX6PEMDpTUu%2Fimage.png?alt=media&#x26;token=581e2da8-691d-46e7-a14d-de20a00087cc" alt=""><figcaption><p>Fuente: <a href="https://defillama.com/protocol/eigenlayer?denomination=ETH">DefiLlama</a></p></figcaption></figure>

#### Staking... ¿Over Liquid Staking?

Yes. Liquid ReStaking (LRT) can be understood as a way of staking the derivative tokens obtained by Liquid Staking (LST). It is, therefore, one more use case given to the LST token.

This type of use of the -LST- token allows any project/protocol to access the security of the Ethereum network without having to create its own token and/or validation chain. To do this, AVS -Actively Validated Service- "zones" are created, each of which represents a project or protocol that wants to benefit from the security of the Ethereum network.

> For the Ethereum hodler, schematically:
>
> * Gabriel has 10 ETH in his wallet, and decides to stake it.
> * Once you have them staked, you decide that 8 ETH will be put into an LST protocol - [Diva Staking](https://divastaking.com/), for example -, so you receive 8 divETH - representation of your staked position -&#x20;
> * A few weeks pass and you hear about [Nektar Network](https://nektar.network/), LRS protocol. He decides to deposit his 8 divETH in Nektar, choosing two different operators he trusts, to whom he deposits 4 divETH.
> * The two operators receive the divETH from Gabirel, who use the divETH received from Gabriel to distribute them between different protocols / AVS that they support

### Nektar Netkwork, Modularity and scalability for Liquid Resttaking

[Nektar Network ](https://divastaking.com/)is a multi-layer restaking network, built on Ethereum. It is made up of different components that create a system designed to optimize the security of Ethereum and its scalability. That is, it is modular, customizable and resilient..&#x20;

Its architecture is built on four main components:

* **Stinger clients**\
  It is a program run locally by Nektar Network operators, creating an efficient P2P (peer to peer) validation network.
* **Diva Staking Protocol**\
  They are a set of smart contracts that allow stakers (liquid) and Nektar operators to coordinate their validation actions.
* **Nektar Restaking Protocol**\
  They are a set of smart contracts that allow Diva stakers to restore their divETH token (LST token) and ETH.
* **Nektar's Marketplace**\
  It allows any service provider to leverage the security of Ethereum to run their protocol, offering rewards to Nektar operators.

Its main characteristics are its **modularity** - modules are added in which you can decide to participate as AVS, Restaker, Operator or Distributor; **resilience** - making [use of DVT](distributed-validator-technology) technology to create a decentralized restaking system; **customizable** - allowing projects to create their customized AVS in rewards parameters and slashing to restorers/operators.

#### A marketplace for decentralized trust

The Nektar network offers a permissionless, open and dynamic marketplace. Any interested protocol can use it to launch its AVS and benefit from the security and robustness of Ethereum.

> Those protocols interested in launching their AVS on Nektar will have to gain the trust of both stakers and operators, so that the latter decide to operate their AVS!

Nektar allows the different AVS:

* **Modulate and delegate** security consensus&#x20;
* **Leverage** the robustness and security guarantees of Ethereum
* Generate a **decentralized trust** between the AVS and a decentralized application



If you want to know more about Nektar Network, visit their [website](https://nektar.network/), [X](https://twitter.com/nektarnetwork) or [Discord](https://discord.gg/6Bh4maXR)!
