How Ethereum restaking is slowly gaining traction
- EigenLayer’s weekly ETH deposits doubled.
- EigenLayer’s total value locked (TVL) soared to $1.67 billion at press time.
While spot ETFs, real-world assets (RWA), layer-2 solutions, and other popular narratives dominate crypto-related talks these days, slowly but surely a lesser-known category was catching up – Ethereum [ETH] restaking protocols.
Increase in native ETH on restaking protocols
A significant increase in native ETH deposits into restaking protocols was observed over the last week, according to on-chain analytics firm TK Research.
As per the post dated 15th of January, the biggest beneficiary was EigenLayer, with a weekly boost of 168K ETH, more than doubling from the previous week.
EtherFi came a distant second with an influx of 14.45K ETH, marking an increase of nearly 28%. Renzo Protocol witnessed a jump of 4.5K ETH, equating to an impressive 55% rise.
Combined, the three protocols attracted around 186.5K ETH in deposits. As per prevailing market prices, this amounted more than $470 million of ETH locked into premier restaking projects.
A relatively young concept, restaking allows ETH stakers to participate in validating new software modules developed on top of the Ethereum ecosystem.
Put simply, the same ETH staked on the Ethereum network can be repurposed to extend security to other applications. The security, therefore, gets shared across the ecosystem.
Note that apart from staking ETH natively, validators also have an option of staking liquid derivatives (LSDs) from Lido, Rocket Pool, and Coinbase.
Moreover, validators earn extra yield in return as the staked ETH is used for securing additional applications.
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EigenLayer leads the away
EigenLayer, the largest restaking protocol, saw a sharp surge in deposits since its mainnet launch in June last year. However, the growth has been meteoric over the past month. Total value locked (TVL) logged a 6x jump to $1.67 billion.
The surge followed a raise in the protocol’s restaking limit to 500,000 ETH from the previous 120,000 ETH.