Emerging Liquid Restaking Sector Approaches Half-Billion TVL

EtherFi continues to lead the nascent liquid restaking sector but faces growing competition from an emerging cohort of rivals

By: Samuel Haig Loading...

Emerging Liquid Restaking Sector Approaches Half-Billion TVL

The surging popularity of EigenLayer, the pioneering Ethereum restaking protocol, is giving rise to an emerging liquid restaking sector.

EtherFi, the leading liquid staking protocol offering native restaking yields via EigenLayer, has grown 630% since Nov. 8, currently boasting a total value locked of $216M, according to DeFi Llama. The protocol has enjoyed sizable inflows since the start of January, with users depositing nearly $110M to EigenLayer in two-and-a-half weeks.

USD-denominated inflows to EigenLayer. Source: DeFi Llama

EtherFi published an updated roadmap on Jan. 9, with the project planning a token generation event for April as it plans to decentralize governance. “Our day one mission was to be the most decentralized, Ethereum-aligned, non-custodial staking protocol,” the team tweeted.

EtherFi said it will publish tokenomics documentation in March, deploy its v3 iteration on mainnet in early Q2, and begin rolling out across Layer 2s — starting with Polygon — in the coming months. Its eETH token is slated for integrations with Pendle, Aura, Morpho, and Silo, among other third-party DeFi protocols between now and April as well.

EigenLayer’s meteoric rise

EigenLayer allows Ethereum stakers to earn additional yields by securing third-party modules while simultaneously validating the Ethereum network. The protocol has recently enjoyed explosive growth, with its TVL exploding more than 550% from $252M on Dec. 18 to $1.65B today.

The protocol supports both native restaking from Ethereum validators and capped deposits in the form of liquid staking tokens (LSTs) such as Lido’s stETH and Rocketpool’s rETH. EigenLayer’s recent growth was propelled by it increasing the limits on LST deposits from 120,000 ETH to 500,000 ETH alongside onboarding six new LSTs.

On Jan. 10, EigenLayer announced it will onboard three new LSTs with a cap of 200,000 ETH each on Jan. 29, setting the stage for its TVL to grow by an additional $1.53B based on current Ether prices.

Liquid restaking

EtherFi became the first LST protocol to offer yields via native restaking on EigenLayer, inspiring a growing segment of liquid restaking tokens (LRTs) building on top of EigenLayer.

On Jan. 16, Frax, the protocol behind the sfrxETH LST — which EigenLayer will support from Jan. 29 — announced its debut LRT integration with Kelp DAO. Kelp’s sfrxETH pool will launch with a cap of 30,000 ETH alongside a pool for Stader’s ETHx LST with a limit of 75,000 ETH.

Kelp DAO currently boasts a TVL of $170.3M since launching in December, according to its website.

On the same day, the nascent LRT protocol Renzo announced the completion of a $3.2M seed round from several prominent crypto venture capital firms. On the same day, Renzo celebrated its TVL surpassing $75M, with the protocol receiving 30,000 ETH in deposits one month after launching.

Rio Network also announced the competition of a seed round led by Polychain Capital and Blockchain Capital on Dec. 18 ahead of its own entrance into the LRT sector.