The market capitalization of liquid restaking tokens has surged 140% to $620M in January.
Ether.fi, a liquid restaking protocol based mostly on Ethereum, has seen demand for its eETH token skyrocket over the previous week, with the overall worth locked (TVL) within the protocol almost doubling to $340M.
eETH is a liquid restaking token (LRT), a comparatively new asset class that DeFi buyers have been piling into forward of the mainnet launch of EigenLayer, a protocol that appears to leverage Ethereum’s strong consensus mechanism to validate different functions via a course of referred to as restaking.
With EigenLayer’s capping deposits for liquid staking tokens however not setting limits on native restaking, eETH is being seen as a lovely native possibility by buyers searching for publicity amid the latest hype.
Customers who restake ETH can earn the common staking yield along with rewards from tasks that select to bootstrap their safety utilizing EigenLayer, which may forego the time and expense related to establishing their very own networks of validators.
EigenLayer is operating a factors program for a future airdrop of its native token, which has brought about over $1.7B value of ETH and liquid staking tokens to be restaked as of Jan. 22.
Nonetheless, as restaked ETH is illiquid – similar to vanilla staked ETH – a wave of protocols like ether.fi, Renzo and KelpDAO have rushed to supply LRTs, which allow buyers to retain their restaking publicity whereas additionally getting a liquid token that may be deployed throughout DeFi to earn extra rewards.
For instance, ether.fi is proposing to incentivize an eETH-ETH market on Morpho, a lending protocol. Such a market would allow merchants to borrow ETH towards eETH and open up extra aggressive methods like ‘looping’ for added EigenLayer publicity.
The nascent LRT sector now instructions a TVL of $620M, up from $200M a month in the past.
