Over the span of the last 10 days, EigenLayer has experienced a significant surge in inflows, attracting over $4.4 billion, largely attributed to its Ethereum restaking feature.
Data sourced from DefiLlama indicates that the protocol now holds $1.93 billion worth of wrapped ether tokens and $2.73 billion worth of staked ether, bringing EigenLayer’s total value locked (TVL) to $6.85 billion as of the current writing.
This milestone propels EigenLayer into the upper echelons of DeFi platforms, showcasing the considerable appeal of Ethereum restaking among investors seeking increased yields.
EigenLayer’s Rapid Expansion in Ethereum Restaking
The influx of capital has propelled the liquid restaking platform to the fifth position among DeFi protocols.
This surge followed EigenLayer’s decision to remove its 200k ETH individual caps on liquid staking tokens on February 5, aimed at stimulating organic demand, as outlined in a January 24 blog post. Although the window for liquid restaking closed on February 10, the subsequent $600 million increase in TVL can be attributed to the appreciating asset prices.
EigenLayer’s TVL boost mirrors a broader trend in the DeFi sector, where the total locked capital in DeFi protocols has surged to $71.2 billion, marking the highest point since June 2022 and nearly doubling the October low of $36.8 billion.
Restaking has emerged as a significant driver of DeFi protocol growth. Capital on the liquid restaking platform ether.fi has soared by 406% in the past 30 days, reaching $1.19 billion, while Puffer Finance experienced a 79% surge in just the last week.
The collective TVL across various liquid restaking protocols, including EigenLayer, now exceeds $10 billion, a substantial increase from December’s $350 million figure.
The Impact of ETH Restaking on Investor Yields
Ethereum restaking enables investors to stake their ETH on both the Ethereum blockchain and other platforms, thereby diversifying the security and utility of their investments. While staking lays the foundation for Ethereum’s security, restaking extends the protocol’s security capabilities to a range of applications on the network.
Moreover, restaking entails earning additional yields on ETH that is already staked on the main Ethereum blockchain. Currently, investors staking ether on Lido can attain an annual yield of 3.7%, while EigenLayer offers a platform for these investors to further optimize their rewards through “restaking” their ether.
