How It Works
Allocation
Section titled “Allocation”EigenYields allocates restaked assets from EigenLayer into yield-generating vaults. This uses EigenLayer’s redistributable slashing mechanism — a capital reallocation tool that moves assets from the staking layer into the vault.
Crucially, no funds are lost through this process. The slashing mechanism is used purely as a way to redirect capital. Your restaked LSTs are deposited into vault smart contracts where they are deployed into yield strategies.
Yield Generation
Section titled “Yield Generation”Each vault deploys its assets into tier-1 DeFi protocols to generate yield above the base staking rate:
- Collateral — LSTs are supplied as collateral on Aave V3 (E-mode)
- Leverage — WETH is borrowed against the collateral at competitive rates
- Deployment — Borrowed WETH is deployed to yield sources such as Lido Earn
The spread between the yield earned and the borrowing cost, combined with the base staking rewards on the LST, produces the vault’s overall return.
Receipt Tokens
Section titled “Receipt Tokens”When your assets are allocated to a vault, you become eligible to claim receipt tokens through EigenLayer’s rewards mechanism. These tokens are ERC-20 tokens minted at a 1:1 ratio with your restaked amount and represent your proportional share of the vault.
As the vault generates yield, the net asset value (NAV) of the vault grows, which increases the value backing each receipt token.
Redemption
Section titled “Redemption”When you want to withdraw, you redeem your receipt tokens through a two-step process. See the redemption guide for the full walkthrough.