If we look at the overall Ethereum market over the past two years, there is an important shift that not everyone has noticed: users are gradually moving from passive staking to staking with 'higher capital efficiency.'
@Lorenzo Protocol #lorenzoprotocol $BANK

EigenLayer is the factor that creates that shift, while Lorenzo is one of the protocols that exploits it in the most practical way.

Interestingly, many people think of Lorenzo simply as 'a yield optimization layer,' but in reality, Lorenzo's role in the EigenLayer ecosystem is much deeper.

The relationship between the two parties is not simply an integration relationship; it resembles the relationship between infrastructure and service layers — where Lorenzo turns the technical opportunities that EigenLayer opens up into user-friendly products for the market.

EigenLayer introduces the concept of restaking: users can reuse staked ETH (or LSTs like stETH, mETH, swETH) as collateral for new validation services, called AVS (Actively Validated Services).

Technically, this is a significant advancement because instead of forcing each service to have its own validator network, they can 'rent' security from Ethereum through the restaking mechanism.

But the problem is: for ordinary users, restaking is not a simple experience.

It comes with slashing risks, many cumbersome technical processes, and yield that is not always easy to predict.

During a time I guided a dev to try restaking manually, I spent nearly 45 minutes explaining each step: choosing LST, configuring risk, allocating AVS, monitoring rewards, and ensuring not to miss any new parameter changes.

If technical people still find it difficult, ordinary users can hardly operate it themselves.

Lorenzo emerges to bridge that gap.

They do not replace EigenLayer; they aggregate all the complexity of restaking into the backend, leaving the user with a simple product: send ETH or LST to Lorenzo, exchange for a representative asset (usually LRT – Liquid Restaking Token), and receive aggregated yield from multiple sources without having to manage risk manually.

It is important to note that Lorenzo does not create new yield; they only optimize the yield that EigenLayer opens up.

This relationship is similar to the relationship between liquid staking (like Lido) and Ethereum PoS: Ethereum creates the staking mechanism; Lido makes staking easy to use, liquid, and able to participate in DeFi.

Lorenzo plays a similar role for EigenLayer.

One point I see many builders in the market undervalue is that EigenLayer is just an infrastructure layer — while end-user value depends on service layers like Lorenzo.

This is also similar to the lesson in staking: Ethereum PoS cannot create LST by itself; it needs protocols like Lido, Rocket Pool, EtherFi to turn staking into a mass product.

With restaking, the story is similar: EigenLayer is the technical core, Lorenzo is what turns it into a popular experience.

When I tried to analyze the growth chart of the restaking ecosystem, it can be seen that the fastest growth in TVL is not in EigenLayer but in liquid restaking protocols.

This shows that the real demand from users is always in the experience part, not in the mechanism part.

One of the biggest benefits Lorenzo brings is optimized risk.

Restaking inherently carries more risk compared to traditional staking because AVS can trigger slashing according to its own logic.

Individual users find it very difficult to estimate the risk of each AVS, the risk correlation between AVS, and whether they are too concentrated on a single AVS.

Lorenzo aggregates everything into one pool, allocates risk more reasonably, and builds an internal insurance model through asset stratification.

This is something that retail users cannot do manually.

In a DeFi project I once worked on, we tried to build an automatic risk management model and realized that users could not calculate the risk-score themselves; only when the system was automated could the product be usable.

Lorenzo is doing the same for restaking.

One second point that is rarely mentioned is liquidity.

EigenLayer, by design, does not provide immediate liquidity for restaked assets.

This locks users' capital, or at least subjects them to unbonding times.

Lorenzo addresses this issue by issuing LRT — a token representing restaked assets.

LRT operates like LST: it represents a staking position while being tradable, usable as collateral, or participating in DeFi.

This opens up a second layer of benefits: users can enjoy restaking yield while also reusing liquidity in DeFi.

This is why LRT protocols are growing rapidly.

In an experiment I once ran with a lending protocol, LRT was as effective as LST if oracles were managed correctly, meaning the DeFi ecosystem could integrate very quickly.

The relationship between Lorenzo and EigenLayer also creates significant benefits for AVS.

AVS want to operate requires security — the more ETH collateral, the better.

But without protocols like Lorenzo, AVS would rely entirely on users restaking manually, which is very slow and difficult to scale.

With Lorenzo, AVS can receive security from a large pool with just a few clicks from retail users.

This is the motivation that drives many AVS to choose to integrate Lorenzo from day one.

I once talked to a group of AVS devs and they shared that without the LRT protocol, the security scale they would receive would be at least 5-6 times smaller.

This proves that LRT like Lorenzo is an indispensable piece in the restaking ecosystem.

However, the benefits of the Lorenzo – EigenLayer relationship do not come without trade-offs.

One of the biggest risks is that layer abstraction can make users unaware of what risks they are taking.

Restaking is not risk-free; AVS has slashing rights.

Lorenzo is trying to reduce that risk through allocation and insurance models, but the risk has never disappeared.

This is what I think users need to understand clearly: high yield comes from providing security for new systems, and any new system always carries risks.

But compared to self-restaking, using Lorenzo is still safer for those without technical expertise.

Another important benefit is the speed of innovation.

EigenLayer provides the framework; Lorenzo can quickly experiment with many new models like leveraged restaking, multi-asset restaking, or yield routing.

These improvements cannot be deployed immediately in EigenLayer due to the need for stability; but in service layers like Lorenzo, the iteration speed is faster.

This is also why the innovation part of the restaking ecosystem is happening in LRT, not in the core layer.

If we summarize the relationship between Lorenzo and EigenLayer, it can be said that EigenLayer provides the restaking economy — while Lorenzo turns it into a usable product.

EigenLayer creates technical value — Lorenzo transforms it into user value.

Restaking opens up new yield opportunities — Lorenzo optimizes yield and reduces risk.

This is a complementary, not competitive, relationship, and it will deepen as AVS begins to be used in practice.

In the next cycle, I think most of the value will come from protocols like Lorenzo: places that help users utilize complex infrastructure simply, safely, and with liquidity.

In any market, complexity always needs an intermediary layer to become user-friendly products.

If EigenLayer is 'open security infrastructure', then Lorenzo is 'the user interface of that security economy'.