EigenLayer Lifts Staking Cap, TVL Soars Past $3B

Liquid
restaking
protocol
EigenLayer
has
temporarily
removed
its
200,000
ether

(ETH)
per-protocol
staking
cap,
spurring
a
$750
million
rise
in
total
value
locked
(TVL)
in
a
matter
of
hours.

Data
from

DefiLlama
shows
that
inflows
of
over
1
million
ETH
flooded
EigenLayer
within
two
hours
after
the
restaking
protocol
lifted
its
cap
on
deposits,
leading
to
a
cumulative
TVL
of
more
than
$3
billion.
EigenLayer
placed
its

official
TVL
at
$3.2
billion
at
press
time,
representing
a
$1
billion
increase
over
the
tally
from
a
day
before.

Restaking
is
a
strategy
that
investors
can
use
to
earn
additional
rewards
on
ETH
that
they’ve
already
“staked”
on
the
main
Ethereum
blockchain.
Staked
tokens
are
locked
up
in
an
address
on
the
chain
in
exchange
for
a
steady
stream
of
interest,
and
behind
the
scenes
they
help
to
secure
the
platform’s
“proof
of
stake”
system.

Read
more:



Crypto
Staking
101:
What
Is
Staking?

EigenLayer
allows
investors
to
earn
additional
interest
on
their
staked
ETH
tokens
by
“restaking”
them
to
secure
other
chains.
EigenLayer
currently
supports
popular
liquid
staking
tokens
(LSTs)
like
lido
staked
ETH
(stETH)
and
rocket
pool
ETH
(RETH).
Lido
and
Rocket
Pool
are
among
a
slew
of
platforms
that
stake
ETH
on
behalf
of
users;
they
issue
LSTs
representing
one’s
stake
which
accrue
interest
and
can
be
traded
just
like
any
other
token.

Lido’s
stETH
tokens
led
the
pack
on
Monday,
accounting
for
$560
million,
or
approximately
80%,
of
new
deposits
into
EigenLayer.

The
removal
of
EigenLayer’s
caps
on
liquid
staking
tokens
(LSTs)
was
designed
to
“invite
organic
demand,”
according
to
a
recent

blog
post
from
the
project.
A
new
cap
will
be
applied
on
Feb.
9,
though
the
project
says
that
it
plans
to
permanently
remove
the
deposit
limit
at
some
point
in
the
future.

EigenLayer
also
announced
that
it
will
soon
roll
out
its
mainnet
launch
for
operators,
a
way
in
which
investors
can
operate
a
node,
and
EigenDA,
a
decentralized
data
availability
service
that
will
become
the
first
actively
validated
service
to
be
built
on
EigenLayer.

Interest
in
EigenLayer
has
surged
in
recent
months
as
a
flurry
of
up-start
projects
like
Puffer
Finance
and

Ether.fi
have
begun
offering
outsized
rewards
–
dubbed
“points”
–
to
users
that
restake
with
them.
But
alongside
the
restaking
boom,

some
developers
are
warning
EigenLayer’s
“shared
security”
model
might
overburden
Ethereum
or
otherwise
strain
the
network.