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The project has surpassed Uniswap to become the fifth-largest DeFi protocol in TVL.
EigenLayer’s total value locked (TVL) has topped $6 billion following the protocol’s decision to open a new restaking window earlier this week, according to data from DeFiLlama. This represents an 181% surge in the last seven days.
With TVL’s current value at $6 billion, EigenLayer has surpassed Uniswap and became the fifth-largest DeFi protocol behind Lido, Maker, AAVE, and JustLend.
On Monday, EigenLayer announced that it would resume restaking and remove TVL caps for all tokens from February 5 to 9, with plans to permanently lift caps in the coming months. The protocol also introduced new liquidity staking tokens (LSTs), including Frax Ether (sfrxETH), Mantle Staked Ether (mETH), and Liquid Staked Ether (LsETH). Less than 48 hours after the restaking period reopened, EigenLayer’s TVL soared 120%.
Restaking is the process of staking liquidity pool tokens a second time. This mechanism allows for the reinvestment of the staking rewards, thereby increasing returns through liquid staking methods. EigenLayer is the pioneer of Ethereum restaking which facilitates the reuse of liquid staking derivatives’ tokens.
While restaking has numerous advantages, such as the potential for double gains and enhanced network security, it does not come without its risks. Vitalik Buterin, the co-founder of Ethereum, previously raised concerns about this model, highlighting in last May’s post that it could overload or clog the Ethereum mainnet, particularly when the Dencun upgrade is underway.
Don't overload Ethereum's consensus:https://t.co/07tzyCrZcJ
— vitalik.eth (@VitalikButerin) May 21, 2023
According to EigenLayer’s latest update, restaking LSTs was paused in preparation for the mainnet launch of EigenDA and Operator. The protocol added that the amount of Ethereum restaked reached 2.45 million.
Restaking LSTs has been paused as we gear up for the Operator & @eigen_da mainnet launch, with an impressive 2.45+ million ETH restaked and ready.
We're excited to further our collaboration with our vibrant community, driving forward Infinite Sum Games. Stay tuned! ♾️
— EigenLayer (@eigenlayer) February 9, 2024
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