The total value locked (TVL) in EigenLayer’s restaking protocol has surged to $20.09 billion, positioning it as the second-largest DeFi protocol after Lido. This notable rise highlights a significant achievement for EigenLayer, which began the year with a TVL of $1.4 billion and currently holds 5.21 million Ethereum (ETH). The recent figures underscore EigenLayer’s rapid growth and increased user interest in its unique restaking model.
What Drove the Rapid Growth?
As of March, EigenLayer’s TVL was around $10 billion, with 2.93 million ETH. The recent TVL hike is attributed to increased deposits and the rising price of ETH. EigenLayer’s mainnet launch in April and the subsequent token distribution plan played pivotal roles in attracting more deposits to the protocol. The innovative restaking model enables users to deposit ETH and various liquid staking tokens, which are then utilized to secure third-party networks, providing mutual security benefits.
Initially, the protocol faced significant outflows due to community dissatisfaction over low AirDrop allocations and the non-transferability of tokens. The discontent stemmed from the linear token distribution model, which many found unappealing. In response, the Eigen Foundation increased AirDrop allocations for all users and clarified the timelines for token unlocks and transferability, which helped mitigate concerns and boosted deposits to the protocol.
How Did Adjustments Impact Inflows?
Following the modifications to AirDrop allocations, EigenLayer experienced a substantial uptick in deposits. On May 31 alone, over $500 million was deposited, signaling a revival of investor confidence. Daily net flow data from The Block reveals a significant increase in inflows, further underscoring this positive trend. The Eigen Foundation has reserved 15% of the 1.6 billion token supply for user distribution over multiple stakedrop seasons, with 5% already allocated as of March 2024.
Key Takeaways for Users
– The restaking model allows for secure third-party network participation.
– Increased AirDrop allocations have positively impacted user confidence.
– Mainnet launch and token distribution plans have significantly attracted new deposits.
– Current TVL and ETH holdings reflect strong user engagement and trust in the protocol.
In conclusion, EigenLayer’s innovative approach and strategic adjustments have propelled it to become the second-largest DeFi protocol. The significant increase in TVL and user deposits suggests a growing trust in the platform’s capabilities and its potential for future growth.
