Since the launch of the EigenLayer restaking protocol in 2023, the majority of the Ethereum community has welcomed the opportunity for additional yields on staked ETH. Eigen Layer opened more possibilities for Ethereum validators to earn more rewards by restaking their already staked ETH to gain access to validate other projects built atop Ethereum.

With Eigen Layer having opened the door to Ethereum restaking, it is no wonder that developers have built on the restaking to provide more possibilities for liquidity on the Ethereum network as well as more opportunities to exploit the security of the Ethereum network.

What is Liquid Staking and Restaking?

Bedrock is a multi-asset non-custodial solution that combines the concept of liquid syaking and Eigen Layer’s novel restaking concept to bring liquidity to the defi space.

What is Liquid Staking?

Since September 2022, Ethereum abandoned the heavy power consumption of the proof of work network in exchange for the proof of stake consensus mechanism which required users to stake 32 ETH in exchange for an opportunity to participate as a validator on the network for rewards.

The result of the staking process is tgat the staked assets are locked up and so unusable. As a way to bypass this illiquidity came liquid staking which was a new process that gave depositors a representative token in exchange for their staked assets.

This representative token is known as the Liquid Staking Token (LST) and can be traded within the DeFi ecosystem using other protocols. Since it stands as a representation of the depositors original ETH claim, it can be exchanged for the underlying ETH value after the prescribed waiting period.

Eigen Layer and Restaking

Also known as the rehypothecation of assets, it involves restaking already locked-up assets to extend crypto-economic security to auxiliary applications built on the network in exchange for increased yield on the staked assets.

The Eigen layer simply allows depositors to restake their staked ETH or LST, providing security to other projects in return for extra staking rewards. Eigen Layer offers two types of restaking: native restaking, which involves submitting the withdrawal credentials to the native ETH in the Eigen Pod, and LST restaking, which involves depositing the LST in the Eigen Layer smart contract.

History of Bedrock

As it exists today, Bedrock was launched in May 2023 by RockX as a proprietary liquid staking protocol to strike a balance between Centralised Finance (CeFi) and Decentralised finance (DeFi). In its development stage, RockX worked closely with SSV network and Peckshield to develop validator technology and compile an audit report.

Following its launch, the project has secured capital from fundraising events tailored at accelerating the projects growth. The investment round was led by OKX Ventures and has participants like Waterdrip Capital, Lbank Labs and even angel investors such as Fisher Yu, one of the founders of Babylon, a Bitcoin staking protocol.

Today, Bedrock is among the industry’s LRT players, with a combined TVL of over $140 million. The protocol has also extended its services to include native Ross chain restacking on chains including Arbitrum, Linea, and Scroll.

What is Bedrock?

Bedrock is a decentralized finance protocol that enables multi-asset liquid restaking. The project is powered by a non-custodial model that allows users to unlock liquidity and stake rewards for Proof of Stake tokens like ETH and IOTX.

The Bedrock project succeeds the new wave in DeFi centered around restaking and liquidity staking protocols and services. This wave quickly followed the launch of Eigen Layer. This project leveraged already staked ETH tokens to increase yield for validators while extending Ethereum’s security to other layer 2 projects built on the platform’s network.

Bedrock takes the game further by merging the restaking concept with the existing liquid staking practice in DeFi. Liquid staking is a specialized staking process where stakers receive tokenized representations of their total stake as a form of liquidity to earn more yield on already staked tokens.

How Does Liquid Restaking on Bedrock Work?

The bedrock model recognizes the extent of yield opportunities Ethereum holders stand to gain from restaking. So Bedrock took the liquid staking service and merged it with Eigen Layer’s restaking concept to offer even more rewards to its users.

Bedrock has a unique project model owing to its multi-asset support and its integration with the Eigen Layer platform. Liquid staking and restaking, as explained above, are not completely obscure concepts. But Bedrock takes it a step further by integrating with Eigen Layer to bring liquid restaking.

Bedrock has a few features that cement its position as a top LRT service provider. First, Bedrock supports more than just Ethereum, which is true for most liquid staking platforms. The protocol supports ETH, BTC, and IOTX. Allowing users to restake multiple assets on the same platform and maximize returns.

The most significant feature of the Bedrock protocol is its ties to the Eigen Layer. The integration with the Eigen layer’s retaking platform allows users to earn additional rewards from the AVS (Actively Validated Services) and benefit from the security offered by the protocol’s restacking process.

Bedrock’s Liquid Restaking Tokens

Bedrock’s restaking model depends on three main products: uniBTC, uniETH, and uniIOTX.

uniBTC

A significant setback for BTC holders was the inability to earn yield while holding their tokens safely. Bedrock provides a solution through its uniBTC token. One uniBTC represents one staked wrapped BTC token. Simply put, 1 uniBTC = 1 wBTC.

The BTC staking mechanism on the Bedrock platform is implemented with the help of an integration with Babylon, a BTC staking platform. The way it works is that staking a wBTC on the Bedrock platform triggers a mechanism where a corresponding actual BTC token is staked on the Babylon network in real-time.

To stake wBTC on Bedrock, start by connecting your preferred wallet and following these steps.

• Grant access to the Bedrock uniBTC smart contract
• Then stake your wBTC to mint uniBTC. Once you’ve staked your wBTC, you will receive uniBTC in your wallet and accrue staking rewards as the token value grows.

Source: docs.bedrock

While Bedrock does not have a minimum deposit qualification for earning rewards, the platform recommends a deposit of 0.005 wBTC to increase the yield. The staking period for uniBTC depends on the lock period recognized on the Babylon network. However, immediately after staking, uniBTC is deposited in your wallet and can be sold or traded on any other DEXs or CEXs to maximize rewards.

uniETH

uniETH was the first product launched on the Bedrock platform. As explained earlier, uniETH allows for Ethereum holders to earn staking rewards on any amount of ETH deposited on the platform.

Similar to its other products, Bedrock’s uniETH represents the staked ETH. So 1 uniETH = 1 ETH. The process for staking ETH in exchange for uniETH is similar to the process for staking uniBTC. After connecting your wallet to the dApp, click on the mint function for unis. Once you’ve staked your ETH, uniETH will be deposited in your wallet for free and can be used on any other decentralized applications or centralized platforms to maximize rewards.

Source: docs.bedrock

Again, because the staking mechanism is dependent on the Ethereum platform and Eigen Layer protocol, the staking period is set by those platforms.

uniIOTX

uniIOTX is a liquid staking token that represents staked IOTX (Internet of Things token) on the IoTeX blockchain. It offers a flexible and liquid way to participate in the IoTeX network’s staking rewards without having to lock up your IOTX tokens for extended periods.

Bedrock has no minimum deposit requirement for IOTX, so anyone can earn rewards on their IOTX token by staking on the Bedrock protocol. The uniIOTX token is built on the chain, and its smart contracts are open and accessible.

The staking process is simple. After connecting your preferred wallet, click the mint/withdraw uniIOTX to stake your IOTX. Once you’ve staked your tokens, the corresponding uniOTX will be deposited in your wallet. Unstaking your tokens must be done in units of 1 million IOTX and will take 94 days to process.

Benefits of the Bedrock Protocol

The Bedrock protocol opens a new world of possibilities for depositors on the Ethereum network, and no doubt signals more potential for the DeFi space. Some of the benefits of the platform include:

Increased Liquidity

The liquid tokens issued by Bedrock offer greater liquidity than traditional staking, making it easier for users to buy, sell, or transfer their assets. This can be particularly advantageous for short-term traders or those who need to access their funds quickly. Additionally, increased liquidity can contribute to higher asset valuations.

Diversification

Multi-asset support allows users to diversify their portfolios, reducing their exposure to the risk associated with any single asset. Users can spread their risk by investing in various cryptocurrencies and potentially improve their overall returns.

Additional Rewards

Bedrock’s integration with EigenLayer opens up new opportunities for earning additional rewards. By participating in various dApps, Bedrock can generate additional income, which can be distributed to users based on their staked assets. This can significantly boost overall returns and make Bedrock a more attractive option for investors seeking to maximize their earnings.

Is Bedrock a Good Investment?

Without a doubt, the picture presented by the Bedrock protocol appears to be one with only upsides: diversified returns, higher yields, greater security for AVS projects, and liquidity. But that is still not the entire picture. In return for the higher yields Eigen layer offers depositors, there is a higher risk of slain in the case of hostile acting of the validator. Other risks include centralization and technical difficulties.

That said, the best course of action is to stay informed by doing research before making any investment decisions.