Liquid restaking platform EigenLayer has become the 5th largest decentralized finance (DeFi) protocol following fresh inflows of over $4 billion after the removal of the staking cap.
Capital locked on restaking protocols now stands at a staggering $10 billion, up from just $350 million in December.
$4 Billion Worth Of Fresh Inflows
The inflows have seen EigenLayer become the 5th largest DeFi platform. The recent surge in inflows results from EigenLayer removing its staking cap in a decision announced on the 5th of February. The protocol stated that the decision to remove the cap was made to encourage organic demand, according to a blog post published by EigenLayer. The impact of this decision was quick and significant, with over 1 million worth of ETH flowing into EigenLayer within only a couple of hours of lifting the staking cap. This propelled its TVL (total value locked) to a staggering $3 billion.
The restaking window closed on the 10th of February, with a further $600 million increase in TVL being attributed to increasing asset prices.
EigenLayer’s Current TVL
Currently, EigenLayer is officially reporting a TVL of $6.6 billion, which represents a staggering increase of $6.5 billion over the past couple of months. Data from DeFiLlama shows that the assets currently locked on the protocol include 469,870 wrapped ether (WETH) tokens, valued at $1.9 billion, and an additional $2.7 billion worth of staked ETH (stETH).
EigenLayer supports several liquid staking tokens, such as Lido-staked ETH (stETH) and Rocket Pool ETH (RETH). The ETH is staked by platforms such as Lido and Rocket Pool on behalf of users, which then issue liquid staking tokens that represent the stake and accrue interest.
The restaking protocol started out on the Ethereum mainnet in June 2023 and initially supported liquid staking tokens from three projects: Lido, Rocket Pool, and Coinbase. Since then, EigenLayer has expanded its offering to include Stakewise’s sETH, Mantle’s mETH, Frax’s sfrxETH, Ankr’s ankrETH, and Binance’s wBETH.
A Surge Across DeFi
The increase in EigenLayer’s total value locked (TVL) is mirrored by a wider surge across the DeFi sector. Currently, the total amount of capital locked in DeFi protocols stands at a staggering $71 billion. This is the highest it has been since June 2022 and is double of October’s low of $36.8 billion.
Restaking has been crucial in this increase, with capital on liquid restaking protocols increasing considerably. For example, capital on the liquid restaking platform ether.fi has increased by over 400% to $1.19 billion in the past 30 days. Others, such as Puffer Finance, have registered an increase of 79% over the past week. TVL across liquid restaking platforms now stands at $10 billion, up from just $350 million in December.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
