March 27, 2024
Latest Cryptocurrency News

EigenLayer Surpasses JustLend to Become Fourth-Largest DeFi Protocol

In a surprising turn of events, Ethereum restaking protocol EigenLayer has emerged as the fourth-largest protocol by total value locked (TVL), surpassing JustLend, according to recent data from DefiLlama.

EigenLayer’s TVL experienced a notable surge, rising by 5.73% to reach $6.99 billion on February 15. The protocol has demonstrated impressive growth, with a 47.95% increase in the past seven days and an astonishing 307% surge over the last month, making it a standout performer in the decentralized finance (DeFi) space.

Top 10 DeFi protocols based on TVL. Source: DefiLlama

This surge in TVL can be attributed to EigenLayer’s strategic decision on February 5, when the protocol temporarily removed its staking cap to encourage organic growth. During this period, EigenLayer’s TVL skyrocketed by over 181%, reaching $6.05 billion on February 10 from $2.15 billion on February 5. Although a new staking cap has been implemented, the project has plans to permanently remove this limit in the future.

EigenLayer’s restaking protocols enable validators and stakers to restake liquid staking derivative tokens, such as Lido Staked ETH and RocketPool’s rETH. These assets play a crucial role in securing and validating other networks while also being deployable in various decentralized finance protocols, allowing users to earn additional yield.

Liquid staking remains the largest protocol category with $42.69 billion in TVL, while restaking protocols now hold the sixth position with a combined TVL of $6.99 billion, as reported by DefiLlama.

An interesting revelation is that one in every four Ethereum validators set their withdrawal credentials to EigenPod in the 30 days leading up to February 9, indicating a significant shift towards EigenLayer.

Interest in staking protocols soared in January, coinciding with EigenLayer surpassing $1 billion in TVL on December 28, 2023. The protocol boasts 108,574 depositors as of February 15, holding a total of over 1.52 million Ether tokens.

EigenLayer is gearing up for further expansion, with plans to launch its mainnet for operators and introduce EigenDA, a decentralized data availability service built on Ethereum, according to a recent announcement on X dated February 9.

Image by Freepik

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