The Growing Interest in Liquid Restaking Protocols
The total value locked (TVL) in liquid restaking protocols has exceeded $3.5 billion, indicating a rising interest among Ethereum investors. Platforms like Etherfi, Renzo, Kelp, Puffer, and others have experienced a surge in deposits due to the utilization of EigenLayer. EigenLayer allows users to maintain access to their funds while staking them on these platforms.
Etherfi is currently the leading liquid restaking protocol with a TVL of over $1.3 billion. Kelp has seen user deposits surpassing $460 million, while Renzo’s TVL stands at $346 million. The recently launched Puffer quickly reached the billion-dollar mark in deposits. Smaller protocols include Bedrock ($89 million TVL), Swell ($66 million TVL), Prime ($29 million TVL), and ClayStack ($6.8 million TVL).
Understanding Liquid Restaking and EigenLayer
Liquid restaking allows token holders to stake their assets on EigenLayer, contributing to its economic security. This differs from traditional liquid staking, which involves staking assets through a liquidity protocol and receiving liquidity tokens in return.
EigenLayer plays a significant role in the growth of these protocols’ TVL as it enables users to deposit and “restake” ether from various liquid staking tokens. Currently, the total value locked in EigenLayer exceeds $7 billion.
While the restaking period for deposits on EigenLayer through liquid staking tokens has closed, users can still utilize LRTs to deposit funds when caps are reached. LRT protocols like EtherFi, Renzo, and Kelp accept ether deposits, restake them on behalf of users, and provide derivative tokens along with points received from Eigen.
Aiming for Rewards with Liquid Restaking Protocols
These protocols offer additional rewards by issuing points from both EigenLayer and the protocol itself. For example, by restaking an LST such as stETH on Kelp, users can accumulate points from both EigenLayer and KelpDAO, increasing their chances of earning rewards from both platforms.
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