Implied yields in liquid restaking: an empirical decomposition of market-implied risk and reward premia

Liquid Restaking Tokens (LRTs) allow users to secure multiple Actively Validated Services (AVSs) simultaneously, offering higher rewards to compensate for additional risk. These rewards often include illiquid, intangible assets like points from loyalty programs, making their true yield difficult to observe directly. For the first time, the emergence of yield futures markets, such as those on Pendle, enables the observation of market-implied forward yields for these complex instruments. While prior work has linked implied yield to aggregate proxies like Total Value Locked (TVL), the specific risk and reward components driving these premiums remain underexplored. We address this gap by constructing and analyzing a market-implied LRT premium spread, benchmarked against a more mature Liquid Staking Token (LST) for matched tenors. Our empirical analysis across various LRTs, chains, and maturities reveals systematic patterns in this spread, which we argue represents the market’s aggregate pricing of both future rewards (e.g., anticipated airdrops) and compensation for a spectrum of risks, including correlated AVS slashing and LRT depegging. By dissecting this spread, our work provides a granular understanding of LRT risk-reward profiles and establishes an empirical foundation for future theoretical models designed to quantify these individual components.