Ethereum staking has recently become very popular along with the recent popularization of re-staking. We talked about this briefly last week.
In an interesting update, EigenLayer was launched on the Ethereum mainnet last week along with the EigenDA data availability layer. Coinbase Cloud and Google Cloud are among the first operators of the protocol and on Friday announced six actively verified services that will be secured through re-staking by EigenLayer.
With this launch, reinvestors on the platform will actually be able to earn additional returns on their staked ETH, which was not the case before. In most cases, people deposited early in the protocol in hopes of receiving higher returns and to speculate on airdrops as EigenLayer allocates re-staking points.
Of course, to use EigenLayer, you must first stake ETH. You can do this directly by running a validator, or use the liquid staking protocol to secure and deposit staking derivative tokens. If you want to get your hands on Liquid Staking Tokens, or LSTs, you can either deposit them on one of these protocols or even buy them. The reason for holding LST is to provide liquidity to holders and some people are looking for access to that. fundamental value.
One of the main ways to get into EigenLayer is to contribute to Ethereum security, so we’ve seen a surge in new validators recently.
For reference, Ethereum completed The Merge in September 2022, converting the network to proof-of-stake. Before The Merge, people were already able to spin up validators on Beaconchain running in parallel with the Ethereum mainnet.
However, the Shapella upgrade that took place in April 2023 caused staking to explode in popularity. This upgrade enabled withdrawals of staked ETH that were previously inaccessible. The withdrawal feature has given some people peace of mind that their funds are safe and can be returned.
As a result, the number of validators willing to participate in the Ethereum network has increased significantly. The validator queue grew to 96,000 in June 2023. The validator entry queue is essentially put in place to ensure the stability of the Ethereum network and prevent too many validators from coming online (or leaving, in the case of exit queues) at any one time. . However, over time, the queues disappeared and the rush to become an Ethereum validator slowed down. Queues remained below 10,000 people from October 2023 until the end of March this year.
But now, as more people try to get in on the re-staking hype, the queue for validator entries has grown to 20,000, creating a strong need for network security.
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