Source: Uncle Jian
As the Ethereum pledge rate increases, the demand for re-staking services also increases, EigenLayer Came into view again. Can re-staking become a new hot spot in 2024? What are the potential projects on the re-staking track? This article will take you to find out.
With the passage of the Bitcoin spot ETF, Ethereum's positive effects appear: the expectation of the adoption of the Ethereum spot EFT, the Cancun upgrade, and the long-sluggish Ethereum are bursting with new vitality.
The pledge amount of Ethereum continues to increase, and the need for re-pledge has become increasingly prominent. EigenLayer allows users to re-pledge ETH, lsdETH (liquidity pledged ETH) and LP Token in other side chains, oracles, middleware, etc., as nodes and receive verification rewards, so that third-party projects can enjoy the security of the ETH main network , ETH pledgers can also get more benefits, achieving a win-win situation.
The trend of re-staking has become the focus of the Ethereum ecosystem as EigenLayer increased the LST mortgage amount. EigenLayer absorbed more than 500,000 Ethereums in just one month. , TVL exceeded 1.6 billion US dollars, becoming the 12th top protocol on the Ethereum chain.
Recently, EigenLayer announced that it will provide re-pledge services for the Cosmos sub-chain, which is of great significance to both Ethereum and Cosmos. EigenLayer provides re-pledge services for Cosmos sub-chains, allowing Cosmos to obtain the security of Ethereum, and also opens up a new world of incremental returns for Ethereum stakers.
The first AVS to use EigenLayer verification service—EigenDA will also be launched soon, and its DA service The narrative has also become a topic of market concern with the skyrocketing price of Celestia’s token TIA.
The re-staking track is not only EigenLayer, there are also many opportunities for derivative projects under the Restaking narrative. Let’s briefly introduce the four types of Restaking:
LSD Restaking: Deposit the LST (stETH, cbETH, etc.) you get after depositing into the LSD protocol into EigenLayer and then stake it.
Liquid-LSD Restaking: Through LRD protocols such as Kelp DAO, LST is entrusted to the LRD protocol and deposited into EigenLayer and then pledged by the protocol, and Users receive the Liquid Restaking Token (LRT), a mortgage certificate token.
Native Restaking: Native liquid staking means that the validator uses the EigenPod smart contract to redirect the validator's withdrawal certificate to EigenLayer.
Liquid Native Restaking: Native liquid restaking refers to projects such as etherf.fi or Puffer Finance that provide small-amount ETH node services. Provide the ETH in the node to EigenLayer and then stake it.
The following statistics show the re-pledge of five unissued coins Projects are for your reference. These five projects can all earn EigenLayer points while earning points for their respective projects.
Kelp DAO is a Restaking project made by Stader Lab, an LSD project that supports multi-chain, and belongs to the Liquid-LSD Restaking mentioned above Type, the two LST tokens, Lido's stETH and Stader's ETHx, are currently open for deposit. However, since the current EigenLayer LST quota is full, deposits are currently suspended.
Although Stader Lab has issued tokens, Kelp DAO has launched a points system. As its sub-project, Kelp DAO should still launch its own tokens. And we can look forward to the linkage effect of SD (Stader Lab’s token) and Kelp DAO.
Swell is an old brand LSD has signed an agreement, and it was announced not long ago that it will enter the field of Liquid Restaking, a product of the Liquid Native Restaking type. After adding the re-pledge function, users can deposit ETH and swap out rswETH, so Swell will no longer be limited by the EigenLayer LST quota.
Since Swell has not released any tokens yet and has no airdrop expectations, its LST token swETH is valued by airdrop hunters and is currently the second-ranked pledged asset in EigenLayer. In the past, LSD could earn points, and you can also earn points by participating in re-staking.
ether.fi is a Liquid Native Restaking type product and has received 530 investments from BitMEX founder Arthur Hayes. Ten thousand US dollars in seed round financing. Unlike Lido, ether.fi adopts a decentralized, non-custodial approach to realize the pledge of ETH, and announced the provision of re-pledge services. Since it is native ETH re-pledge, it is not subject to EigenLayer LST can still be deposited despite the limit, and its mortgage certificate token eETH (wrapped token weETH) is also one of the few liquid LRT mortgage certificate tokens currently.
Renzo is also a Liquid Native Restaking type product and will not be restricted by the EigenLayer LST deposit limit. Currently, it can deposit. However, it should be noted that the ETH deposited in Renzo is currently not open for redemption, and the mortgage certificate ezETH cannot be transferred, and it will be locked in the short term.
On January 16, Renzo announced the completion of a US$3 million seed round of financing, which has guaranteed security and has a smaller lock-up volume compared to similar protocols. At present, Renzo It seems to be more cost-effective.
It should be noted that because of the form of reward points for new players and the unannounced team background, as well as the fact that redemption is not open, it has been questioned and distrusted by some users.
Puffer Finance is an anti-slash liquidity staking protocol, which is similar to ether.fi and also belongs to Liquid Native Restaking type products are currently not open for staking. Puffer Finance has received a seed round led by Jump Crypto, raising a total of $6.15 million at an undisclosed valuation.
EigenLayer has a 32 ETH threshold requirement for general Ethereum re-pledge nodes, which can be reached before AVS can be run.
Puffer's re-pledge function is to lower this threshold below 2 ETH in an attempt to attract small nodes.
Pendle is a decentralized interest rate trading market that provides transactions of PT (Principal Token, principal token) and YT (Yield Token, income token). We can use YT transactions in Pendle to accelerate the acquisition of ether.fi and EigenLayer points.
Enter Pendle's YT-eETH transaction and buy YT-eETH. By holding YT-eETH, you can receive staking income, double ether.fi points, EigenLayer points, and Pendle trading rewards. Currently, 1 eETH can buy approximately 11 YT-eETH, which is equivalent to 11 times the leverage.
Looks like the benefits are very attractive, right? But after understanding the price mechanism of YT, you will know that the price of YT gradually decreases as the expiration date approaches. This is essentially exchanging time for pledge income and points.
Of course, you can also obtain the above rewards in the form of group LP, which is a lower-risk method. However, there are also disadvantages, such as being susceptible to impermanent losses, and the efficiency of obtaining points is relatively low.
Tips: If you don’t know much about Pendle, please learn the relevant knowledge before operating it. Due to space limitations, this article cannot explain it in too much detail.
Re-pledge, as an emerging concept in the encryption field, is emerging and provides benefits to pledgers Provides more opportunities to join different networks and increase your earnings. EigenLayer calls itself the “Airbnb of decentralized trust,” underscoring the appeal of the opportunity. However, re-hypothecation is not without risks, and it introduces a series of potential issues that deserve careful consideration.
1.Penalty Risk: There is an increased risk of losing staked ETH due to malicious activity.
2.Concentration risk: If too many stakers move to EigenLayer or other protocols, it may cause systemic risks to Ethereum.
3.Contract risk: There may be risks in the smart contracts of each agreement.
4.Multi-level risk superposition: This is the key issue of re-pledge. It combines the existing pledge risk with additional risks to form multi-layered risks.
The ETH/BTC exchange rate experienced a strong rebound after the adoption of the Bitcoin spot ETF. With the Cancun upgrade and Ethereum With the support of Fang spot ETF and other favorable conditions, the Ethereum ecosystem will also rebound. The next main theme of the Ethereum ecosystem is the L2 sector, which is directly beneficial to the Cancun upgrade, and the other is the re-staking ecosystem of EigenLayer.
Using the projects mentioned today to participate in re-staking is undoubtedly the most cost-effective option. As long as you participate in staking, you can eat two or three of the same fish. It should be noted that the recent airdrop rules of Altlayer mentioned that airdrops will be given to EigenLayer stakers, but it is still unknown whether pledges to protocols such as Kelp DAO and Renzo can be penetrated and recognized as EigenLayer stakers.
Of course we must also realize that the constant re-hypothecation of nesting dolls is essentially speculative leverage created for liquidity. While bringing higher returns, it also amplifies risks. No matter which layer of the protocol has a contract problem, user assets will be damaged.
Explanation of terms
Restaking: Restaking involves Liquidity staked tokens are staked, enhancing security while allowing stakers to earn rewards from services provided by the middleware application.
AVS (Actively Validated Services): Active verification service, any system that requires its own distributed verification semantics for verification, such as side chains, data availability layers , new virtual machines, keeper networks, oracle networks, bridges, threshold encryption schemes, and trusted execution environments.
LSD (Liquid Staking Derivatives): Liquid pledged derivatives refer to the receipt tokens obtained after staking the tokens, which is equivalent to going to the bank Certificate of deposit after deposit.
LST (Liquid Staking Token): Liquid staking token, representing tokens pledged on POS (Proof of Stake) blockchain, such as Lido stETH, Coinbase’s cbETH, etc.
LRT (Liquid Restaking Token): Liquid re-pledge token, pledge LST again to obtain LRT.
Related project websites
EigenLayer: https://www.EigenLayer.xyz/
Kelp Dao: https://www.kelpdao.xyz/
< /li>Swell: https://app.swellnetwork.io/
ether.fi：https:/ /www.ether.fi/
Puffer Finance: https://www.puffer.fi/
Pendle: https://www.pendle.finance/
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