When I first saw restaking yields being discussed across dashboards and threads, I noticed a pattern that bothered me. Everyone was talking about numbers, but very few people were talking about sources. APRs were compared, screenshots were shared, and strategies were copied — yet almost no one was asking the most basic question: where is this yield actually coming from? Over time, I realized this misunderstanding isn’t accidental. Restaking introduces a completely new yield structure, and most users are still applying old mental models that simply don’t work anymore.
The biggest misconception is that restaking yield is “extra yield” layered on top of staking, as if it appears out of thin air. That framing is dangerously misleading. In reality, restaking yield is compensation for additional economic responsibility. When you restake, you are extending your capital’s role beyond securing a base layer and into securing external services. Yield is not a bonus; it is payment for taking on new forms of risk and obligation.
Another common misunderstanding is thinking that yield is generated by protocols in isolation. Many users assume AVSs somehow mint yield the way DeFi protocols mint rewards. That’s not how it works. Restaking yield is fundamentally demand-driven. AVSs pay for security, reliability, and economic guarantees. The yield exists because someone on the other side values those guarantees enough to pay for them. Once you see this, restaking starts to look less like farming and more like a marketplace for economic security.
What complicates things further is that restaking yield is conditional. Unlike base staking rewards, which are relatively predictable, restaking yield depends on ongoing performance, adherence to rules, and system health. Slashing, penalties, and changing incentive schedules are not edge cases — they are core components of the yield mechanism. Many users look at headline APRs without internalizing that those returns are tied to continuous correctness and coordination across multiple layers.
I also think users underestimate how much yield is influenced by capital behavior. When large amounts of capital rush into the same AVS, yields compress quickly. When capital exits suddenly, yields spike but risk increases. This means yield is not just something AVSs “offer”; it’s something that emerges from how capital is distributed across the ecosystem. Without coordination, users end up sabotaging their own returns by overcrowding the same opportunities
Another layer of misunderstanding comes from conflating raw yield with realized yield. Dashboards show theoretical returns assuming perfect conditions. Realized yield is what users actually take home after accounting for slashing risk, downtime, rebalancing costs, and missed opportunities. In restaking, the gap between raw and realized yield can be significant. Most users only learn this after the fact, when expectations collide with reality.
What really changed my perspective was realizing that restaking yield is not static income — it is managed income. It requires allocation decisions, timing considerations, and risk boundaries. Systems like Lorenzo exist precisely because individual users are not equipped to manage all of this manually. Yield does not just depend on which AVS you choose, but on how that choice fits into a broader capital flow system.
There’s also a tendency to treat restaking yield as purely financial, ignoring its operational roots. Yield exists because AVSs need uptime, correctness, and coordination. When those services are scarce or mission-critical, yield rises. When they become commoditized, yield falls. This is no different from real-world markets, but many users still approach restaking as if it were a static DeFi pool.
Another misunderstanding is assuming higher yield always signals better opportunity. In restaking, higher yield often signals higher volatility, lower adoption, or higher operational risk. Yield is not a quality label; it’s a price signal. Interpreting it correctly requires understanding why it’s high, not just that it is high. This is where many strategies quietly break down.
I’ve also noticed that users often underestimate correlation risk. Restaking exposes capital to multiple AVSs, but those AVSs may share common dependencies, validator sets, or market conditions. Yield can look diversified on the surface while remaining structurally correlated underneath. Without proper routing and segmentation, this creates hidden fragility that only shows up during stress.
Over time, I’ve come to see restaking yield as something closer to infrastructure revenue than DeFi incentives. It’s earned, conditional, and sensitive to system health. That’s a very different paradigm from yield farming, and applying old habits leads to false confidence. Understanding this distinction is critical for anyone allocating serious capital.
This is also why yield coordination matters so much. If yield were simple, coordination wouldn’t be necessary. But because yield emerges from interaction between capital, services, and risk, uncoordinated behavior leads to worse outcomes for everyone. Coordinated systems don’t eliminate risk — they make it legible and manageable.
What most users miss is that restaking yield is not about maximizing numbers; it’s about sustaining flows. The healthiest restaking environments are not the ones with the highest APRs, but the ones where yield persists without constant capital shock. That kind of yield doesn’t look exciting on day one, but it compounds far more reliably.
Once I reframed restaking yield this way, my entire approach changed. I stopped asking “what pays the most?” and started asking “what is this yield compensating me for?” That single question filters out most bad decisions instantly.
In the end, restaking yield is not misunderstood because it’s complicated. It’s misunderstood because people are still using the wrong mental models. Yield is no longer just a reward. It’s a signal, a payment, and a responsibility rolled into one. And until users internalize that, they’ll keep chasing numbers without understanding the system producing them.
