The transition of Ethereum to Proof-of-Stake (PoS) was designed to enhance network efficiency, but the emergence of restaking mechanisms introduces significant security vulnerabilities. While restaking appears to offer additional yield opportunities for validators, it fundamentally threatens Ethereum’s security framework. Historical context from Proof-of-Work (PoW) networks reveals similar patterns. Small PoW chains utilizing merge-mining faced security compromises as large mining pools could attack them with minimal resources while maintaining Bitcoin’s security. This established a precedent where efficiency gains came at the expense of security. In the PoS context, restaking enables validators to reuse staked ETH across multiple protocols, creating a ‘one-stake, multiple-yield’ model. This practice undermines PoS security fundamentals by diluting the economic penalties that deter malicious behavior. While PoW merge-mining primarily endangered smaller chains, restaking poses direct threats to major PoS networks like Ethereum. The core issue lies in restaking’s alteration of PoS security economics. Traditional staking requires validators to maintain dedicated commitment with their assets at risk. Restaking allows diversified commitments across multiple networks, reducing the effectiveness of slashing mechanisms as validators can recover losses through alternative revenue streams. Participants in restaking protocols, whether intentional or not, contribute to systemic risk. Platforms like EigenLayer attract ETH holders with promises of enhanced yields while transferring potential risks to the broader validator ecosystem. This creates a scenario where restakers benefit from Ethereum’s security while potentially compromising it. The situation parallels historical strategic vulnerabilities, reminiscent of interconnected systems where single points of failure can trigger cascading collapse. Restaking interlinks multiple protocols, creating systemic exposure where issues in one restaked project could propagate throughout the entire network, including Ethereum’s mainnet. This analysis highlights the critical balance between capital efficiency and network security in blockchain ecosystems, emphasizing that restaking mechanisms may introduce unacceptable risks to Ethereum’s long-term stability and security.