Ethereum EigenLayer’s 14x Growth in One Year: Redefining DeFi?

Published in: April 28, 2024

• EigenLayer deposits were equivalent to approximately 4% of the total circulating supply of ETH.
• Thanks to EigenLayer, the staked ETH supply has increased by 10% year-to-date.

EigenLayer has attracted over $15 billion in deposits in just over a year since its launch, emerging as one of the most successful decentralized finance (DeFi) projects in recent times.

The recovery protocol’s total value locked (TVL) has grown 14-fold since the beginning of the year, a feat that made it the second-leading TVL DeFi project, according to AMBCrypto’s analysis of DeFiLlama data.

The deposits were equivalent to around 4% of Ethereum [ETH] total circulating supply, the asset around which your primary use case revolves.

ETH bet is revitalized

Restoration, one of the most talked about topics in the Web3 sector right now, adds value to staked ETH by repurposing it to provide security for applications other than the Ethereum mainnet.

The setup helps punters earn additional returns on their deposits.

EigenLayer, the largest recovery protocol, has arguably had a cause and effect relationship with ETH staking.

According to AMBCrypto’s analysis of Sating Rewards data, staked ETH supply has increased 10% year-to-date (YTD), mimicking the rise in EigenLayer deposits.

By contrast, liquid ETH available on exchanges has continued to fall, as AMBCrypto noted using Glassnode data.

A change in market structure?

This notable divergence underlined ETH’s growing status as a long-term, yield-generating investment asset, far from its roots in speculative trading.

Additionally, with more and more ETH locked up in staking services, the asset would surely become less volatile, opening up to a broader cohort of investors.

Is your wallet green? Check the ETH Profit Calculator

At the time of writing, the second-largest asset was trading at $3,141, following a 2.38% rise over the week, data from CoinMarketCap revealed.

The market sentiment was one of greed, according to the latest readings from the Ethereum Fear and Greed Index, implying that demand for the asset was still strong.

This is an automatic translation of our English version.