Exploring Eigen Layer as Ethereum’s Second-Largest DeFi Protocol
Discover how Eigen Layer has emerged as Ethereum’s second-largest DeFi protocol by locking $12.4 billion in total value, leveraging Ethereum’s staking infrastructure to empower validators with restaking rewards.
Key Features of EigenLayer’s Restaking Protocol
- EigenLayer’s restaking protocol was launched on Ethereum’s mainnet in June 2023.
- Validators can earn additional rewards by securing new Ethereum features through restaking.
- The concept of “restaking” introduces a novel income stream for validators in the form of “security-as-a-service.”
Emergence of Liquid Restaking Tokens (LRTs) Ecosystem
- Coinbase’s report highlights the growing ecosystem around Liquid Restaking Tokens (LRTs).
- Over half a dozen protocols offer liquid restaking tokens with diverse incentives and airdrop schemes.
- Approximately 62% of the 3 million ETH locked in EigenLayer are wrapped in secondary protocols.
The Future of Restaking Tokens
Explore the potential of restaking tokens as a pathway for ETH returns and the challenges faced by Liquid Restaking Tokens (LRTs) in the near term.
Challenges and Opportunities for Liquid Restaking Tokens
- LRTs face challenges with relatively low Actively Validated Services (AVS) yields post-launch.
- No AVS has been launched on the mainnet yet, with EigenDA expected to roll out in early Q2 2024.
- EigenDA is anticipated to offer cost-effective L2 transactions, enhancing Ethereum’s toolkit.
Closing Thoughts on Eigen Layer and the Future of Restaking
Consider the impact of Eigen Layer as Ethereum’s second-largest DeFi protocol and the potential growth of liquid restaking tokens in the evolving crypto landscape.
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