Parsec Weekly #51
EigenLayer: the rise of restaking
With this edition marking the final Parsec Weekly of 2023, we wish you a Merry Christmas and Happy New Year!
-parsec team
EigenLayer: the rise of restaking
Amid the recent Solana season, Ethereum mainnet has been relatively quiet as of late but with EigenLayer recently increasing deposit caps, there are signs of life once again.
For the uninitiated, EigenLayer allows ETH stakers to restake their ETH to provide economic security for additional protocols or services. Given the novelty of this primitive, the design space is scarcely explored but Data Availability, Security and Oracle use cases are all being discussed. Traditionally, protocols would need to bootstrap economic security using a native token where EigenLayer allows for the economic security of ETH to be re-used or “borrowed”.
On Dec 18th, EigenLayer increased the restaking caps for current LSTs (rETH, stETH, cbETH) and allowed 6 new LSTs to participate in restaking, notably:
wBETH (Binance)
osETH (Stakewise)
swETH (Swell)
AnkrETH (Ankr)
EthX (Stader)
oETH (Origin ETH)
Having raised the caps, EigenLayer TVL hit $1b in less than 48 hours showing significant demand for restaking (or perhaps more likely, demand to farm what many speculate to be airdrop points)...
Of the new LSTs, swETH by Swell was the clear leader, followed by ETHx issued by Stader:
The recent increase in restaking caps has also seen the emergence of Liquid Restaking Tokens or LRTs. Both via native restaking and restaking via LSTs, these protocols offer a liquid receipt token for EigenLayer deposits.
Notably, Ether.fi and Renzo are natively restaking which allows for uncapped point-earning deposits, while Kelp offer a LRT representing restaked stETH and ETHx which means they are subject to the underlying EigenLayer LST deposit limits. Ether.fi and Kelp are leading the charge here with over 70kΞ in LRTs issued thus far:
With this recent excitement surrounding EigenLayer along with expectations for the Dencun upgrade and EIP4844 being pulled forward to February, it feels as though the holiday season could be a fruitful one for the Ethereum ecosystem.
Check out the following layouts to monitor the recent EigenLayer developments:
As always we appreciate your readership, if you enjoyed this article please leave a like and share it around. Have a good weekend and we’ll see you next week!
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