EigenLayer, the Liquid Staking Token restaking protocol on the Ethereum blockchain, has seen its total locked value (TVL) increase by $1.6 billion since yesterday. With this sum set to increase over the next 3 days, restaking seems to have found its audience.
EigenLayer could soon overtake Uniswap
Yesterday, Ethereum’s restaking protocol, EigenLayer, officially lifted its retaking limit previously set at 200,000 Ethers. This limit removal will be effective until February 9, 3 days from now.
In the enthusiasm generated by this new restaking possibility, EigenLayer saw the total locked value (TLV) on its protocol jump by more than 74% in less than a day, from $2.15 to $3.75 billion.
Change in total locked value (TVL) per EigenLayer
In the TVL rankings, EigenLayer now ranks 6th among decentralized finance protocols (DeFi), just behind Uniswap (UNI).
ETH restaking generates rewards by depositing LSTs in a dedicated smart contract, unlike traditional staking, which involves delegating tokens. Ethereum’s EigenLayer protocol enables users to reinvest their already staked Ethers with the LSTs obtained, with the aim of securing other protocols and increasing their returns.
Restaking aims to optimize the returns that capital can bring, as well as strengthening the security of Ethereum protocols. But Ethereum co-founder Vitalik Buterin has regularly warned of the systemic risks that LST restaking could bring.
Indeed, if a protocol were to fail and its funds stolen, this could compromise the security of the Ethereum network.
