TVL for All Liquid Restaking Protocols Crosses $3.5B

UTC by Bhushan Akolkar · 2 min read
TVL for All Liquid Restaking Protocols Crosses $3.5B
Photo: Freepik

EigenLayer is one of the major contributors to the liquid restaking protocols wherein Ethereum validators utilize their Ether stakes to bolster the security of other networks.

The growing interest in liquid restaking protocols is unmistakable. As a result, the total value locked (TVL) now surpasses a hefty $3.5 billion, signaling a growing trend among Ethereum investors.

Liquid restaking protocols like Renzo, Etherfi, Kelp, and Puffer have witnessed a surge in deposits over the past month. This surge is majorly due to users opting to leverage EigenLayer through these channels while offering them continued access to their assets.

Leading the pack is Etherfi, boasting the highest TVL among these protocols at over $1.3 billion. Following closely behind are Kelp with $460 million in deposits and Renzo with a TVL of $346 million.

Moreover, the introduction of Puffer into the liquid restaking terrain has been remarkable, swiftly surpassing the billion-dollar mark in deposits shortly after its debut. Other smaller players in the liquid restaking space include Bedrock with a TVL of $89 million, Swell at $66 million, Prime at $29 million, and ClayStack at $6.8 million.

Distinct from traditional liquid staking, liquid restaking on EigenLayer allows token holders to stake their assets, thus bolstering its economic security. This novel approach enables users to deposit and restake Ether from various liquid staking tokens, contributing to the overall growth in TVL across these protocols.

EigenLayer TVL Growth and Contribution

Through EigenLayer restaking, Ethereum validators utilize their ether stakes to bolster the security of other networks. Currently, EigenLayer boasts a TVL exceeding $7 billion.

While the recent opening of the restaking period for deposits on EigenLayer through liquid staking tokens has concluded, LRTs step in to offer users an avenue for depositing funds on Eigen when caps are reached. Unlike “native restaking”, which directly involves ether validator stakes on EigenLayer and remains uncapped, LRT protocols like Renzo, EtherFi, and Kelp continue to accept ether deposits. They restake these on behalf of users and return a derivative token along with a commitment to distribute points received from Eigen.

Users depositing on EigenLayer through LRTs earn points for their ether deposits. This enhances their chances of receiving a token from EigenLayer. Consequently, many users are opting to deposit via LRTs, anticipating rewards from these protocols and eyeing potential retroactive airdrops. This dual incentive structure makes LRT protocols attractive with minimal additional economic risks, as highlighted by Eden Au, research director at The Block.

By staking an LST like stETH on Kelp, users can earn points from both EigenLayer and Kelp DAO. This enhances their opportunities to receive rewards from both protocols.

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