Over the past 10 days, EigenLayer witnessed a major increase in inflows, receiving over $4.4 billion with its Ethereum restaking feature as a key contributor.
According to data from DefiLlama, there is now $1.93 billion worth of wrapped ether tokens locked on the protocol, as well as $2.73 billion worth of staked ether. EigenLayer’s total value locked (TVL) currently stands at $6.85 billion at the time of writing.
Elevating EigenLayer to a top-tier DeFi platform, this development reveals the potent allure of Ethereum restaking for investors seeking enhanced yields.
EigenLayer’s Rapid Expansion in Ethereum Restaking
The influx of inflows has seen the liquid restaking platform rise to the fifth largest protocol in DeFi.
Protocol by Rankings:
1. Lido $26.781B
2. Maker $8.306B
3. AAVE $8.116B
4. JustLend $6.971B
5. EigenLayer $6.859B
6. Uniswap $4.678B
7. Rocket Pool $3.39B
8. Spark $3.021B
9. https://t.co/tw1Zm4bWmL $2.948B
10. Instadapp $2.526B
– DefiLlama
— Jungle Tales (@jungletales69) February 14, 2024
The increase in inflows occurred following EigenLayer’s removal of its 200k ETH individual caps on liquid staking tokens on February 5, a move intended to “encourage organic demand,” as detailed in a blog post on January 24. While the opportunity for liquid restaking closed on February 10, the subsequent $600 million surge in TVL can be linked to the rising prices of assets.
The boost in EigenLayer’s TVL is reflective of a broader trend within the DeFi sector, where the total capital locked in DeFi protocols has reached $71.2 billion. This marks the highest point since June 2022 and is nearly double the total recorded during October’s low of $36.8 billion.
Restaking has played a big role in the upward trajectory of DeFi protocols. Capital on the liquid restaking platform ether.fi has witnessed a 406% increase, reaching $1.19 billion in the past 30 days, while Puffer Finance has seen a 79% surge in the last week alone.
The TVL across various liquid restaking protocols, including EigenLayer, now stands at $10 billion, a major rise from December’s figure of $350 million.
The Impact of ETH Restaking on Investor Yields
Ethereum restaking allows investors to stake their ETH on both the Ethereum blockchain and additional platforms, broadening the security and utility of their investments. While staking can be seen as establishing the groundwork for Ethereum’s security, restaking expands the protocol’s security capabilities to various applications on the network.
Restaking also involves earning additional yields on ETH that is already “staked” on the main Ethereum blockchain. Investors staking ether on Lido can currently achieve an annual yield of 3.7%, while EigenLayer provides a platform for these investors to “restake” their ether for more rewards.
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