EigenLayer, an Ethereum-based re-staking protocol, has surpassed Uniswap, the leading decentralized exchange (DEX) on the Ethereum network, in total value locked (TVL).
EigenLayer has emerged as the best-performing decentralized finance (DeFi) protocol over the past month, according to data from DeFillama. TVL has surged 171% in the last seven days alone, reaching $5.67 billion, making it the 5th largest DeFi protocol.
In contrast, Uniswap saw its TVL increase by 6% over the same period, reaching $4.31 billion. Other major DeFi protocols such as Lido, Aave, and Maker have also seen relatively modest growth rates of less than 10%.
Meanwhile, EigenLayer’s surge comes as staked ETH rises to an all-time high of more than 29 million tokens, despite a recent selloff by defunct cryptocurrency lender Celesius. CryptoSlate.
Why is EigenLayer TVL soaring?
EigenLayer’s surge can be attributed to the reopening of its deposit vaults on February 5th.
Since then, the platform’s ETH holdings have seen a significant increase, jumping from 941,000 to 2.3 million in a week. These inflows represent approximately 2% of the total circulating supply of Ethereum currently staked through this platform.
Blockchain analytics firm SpotOnChain reported that EigenLayer’s top four restakers are Puffer Finance, Tron’s network founder Justin Sun, Eigenpie, and Kelp DAO. Puffer Finance leads the group with 233,600 ETH restakes, followed by Sun with around 109,300 ETH. Eigenpie and Kelp DAO follow closely behind, re-staking 88,600 ETH and 75,300 ETH respectively.
What is EigenLayer?
EigenLayer has dominated the re-staking market and is receiving significant attention from the cryptocurrency community. Starting in June 2023, this DeFi protocol has gradually increased deposit limits through a phased rollout strategy.
ETH re-staking has emerged as one of the main stories in the cryptocurrency market as it allows investors to earn additional rewards for their staked ETH. The protocol supports popular liquid staking tokens such as Lido Staked ETH (stETH) and Rocket Pool ETH (RETH) re-staking through the platform.
Murathan, a contributor to the DeFi Collective, pointed out the growing popularity of native re-staking among ETH validators. He said:
“One in four validators entering the Ethereum validator queue are setting their withdrawal credentials on EigenPod.”
But some community members have warned that this model could create a Ponzi scheme that could soon collapse.