EigenLayer, an Ethereum-based restaking protocol, has surged past Uniswap, the foremost decentralized exchange (DEX) on the Ethereum network, regarding total locked value (TVL).
Data from DeFillama shows that EigenLayer has emerged as the top-performing decentralized finance (DeFi) protocol over the past month. Its TVL skyrocketed by 171% in the last seven days alone, reaching $5.67 billion, positioning it as the fifth-largest DeFi protocol.
In contrast, Uniswap saw a modest 6% increase in TVL, reaching $4.31 billion during the same period. Other prominent DeFi protocols, such as Lido, Aave, and Maker, also experienced comparatively modest growth rates of less than 10%.
Meanwhile, EigenLayer’s rapid increase follows staked ETH growth to an all-time high of more than 29 million tokens despite the recent selloff by the defunct crypto lender Celsius, according to Nansen data shared with CryptoSlate.
Why is EigenLayer TVL surging?
EigenLayer’s surge can be attributed to the reopening of its vault for deposits on Feb. 5.
Since then, ETH holdings on the platform have skyrocketed from 941,000 to 2.3 million within a week, marking a significant increase. This influx represents approximately 2% of Ethereum’s total circulating supply now staked through this platform.
Blockchain analytics firm SpotOnChain reported that the top four restakers on EigenLayer are Puffer Finance, Tron’s network founder Justin Sun, Eigenpie, and Kelp DAO. Puffer Finance leads the group with 233,600 ETH restaked, followed by Sun with around 109,300 ETH — Eigenpie and Kelp DAO trail closely, having restaked 88,600 ETH and 75,300 ETH, respectively.
What is EigenLayer?
EigenLayer dominates the restaking market, attracting significant attention from the crypto community. Since June 2023, this DeFi protocol has gradually increased its deposit limit through a phased launch strategy.
ETH restaking has emerged as one of the leading narratives in the crypto market as it allows investors to earn extra rewards on their staked ETH. The protocol supports popular liquid staking tokens such as lido-staked ETH (stETH) and rocket pool ETH (RETH) restaking via its platform.
Murathan, a contributor to DeFi collective, pointed out the increasing popularity of native restaking among ETH validators. He said:
“1 in every 4 validators entering the Ethereum validator queue are setting their withdrawal credentials to an EigenPod.”
However, some community members have warned that the model might create a Ponzi scheme that could come crashing soon.
The post Ethereum restaking protocol Eigenlayer TVL surges amid rising ETH staking appeared first on CryptoSlate.
