Ethereum re-staking protocol EigenLayer saw approximately $157 million in ETH staked by Lido inflow over the past 24 hours, marking the highest inflow of digital assets on the platform since February.
In particular, this significant influx into EigenLayer occurs during: Lido’s share of the Ethereum staking market fell below 30% due to leaks to the re-staking protocol.
Removing the LST cap
On April 16, EigenLayer announced that it was removing limits on all ETH Liquid Staking Tokens (LST) and non-suspended re-staking deposits.
Removing LST limits marks a pivotal step for the EigenLayer ecosystem as EigenLayer works to foster an open marketplace for innovation and grants users unrestricted access to all LST pools on the platform. Previously, EigenLayer imposed limits to enhance decentralization and mitigate the risk of domination by a single token.
These limits have been lifted intermittently over the past year prior to the recent mainnet launch. However, the decision to remove the cap is accompanied by a 33% governance participation limit for liquid staked tokens to maintain neutrality and decentralization.
Despite recent market volatility, EigenLayer remains the dominant protocol within the re-staking sector, controlling 99% of the market. According to data from DeFillama, there are currently about 4 million ETH on the platform, worth more than $12.2 billion.
Restake weakens Lido’s dominance.
According to the Dune Analytics dashboard curated by Dragonfly analyst Hildobby, Lido experienced the largest outflow of any staking platform last month, totaling 400,000 ETH, reducing its market share to 28.87%.
During the same period, liquidity re-staking protocols Ether.fi and Renzo attracted over 700,000 ETH to their platforms.
Market observers attributed Lido’s decline in market share to increased competition within the liquid staking environment. Ethereum educator Anthony Sassano said:
“The best way to stem Lido’s growth and reduce its market share is to increase competition in the staking space. We have done that now! The Ethereum staking ecosystem is healthier than ever, and we look forward to seeing a more decentralized staking ecosystem over time.”
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