The Ethereum re-staking protocol, EigenLayer, continues to attract investors, something that is reflected in the influx of money it has had since the beginning of the year. The total value locked (TVL) has skyrocketed by 1,000%, going from 1,343 million dollars last January to 14,928 million dollars todayas seen in the DeFiLlama chart below.
TVL of the EigenLayer protocol. Source: DeFiLlama. Currently, it is classified as the second largest DeFi protocol on the Ethereum network, surpassing Aave, a historic decentralized platform, which began operations in 2017. Which shows the rapid growth of EigenLayer after its founding in 2021. Aave was initially launched on Ethereum and later expanded to other networks. Its main purpose is to facilitate the lending of tokens without the need for a traditional bank or financial institution. This has allowed it to become a platform that manages a TVL of 8.8 billion dollars. The increase in the re-staking protocol was driven after the announcement of several developments in recent days. One of those is the introduction of the Eigen Foundation, an independent organization dedicated to accelerating the growth of the EigenLayer ecosystem.
EigenLayer will have an airdrop
Additionally, The protocol also recently unveiled the launch of the EIGEN token. This cryptoactive allows reaching a consensus on data that cannot be verified directly on the network, but can be validated through agreement between multiple observers. This was called «intersubjective agreement», crucial for the functioning of applications such as prediction markets, storage services and gaming virtual machines, the protocol explains. Another key factor for the rebound of EigenLayer has to do with the announcement of an airdrop or «stakedrop» as the distribution has been called, precisely of the EIGEN token. As pointed out by cryptopedia, the educational section of BitcoinDynamic, These types of practices are common in the cryptocurrency industry, since it is a way to promote projects, increase the activity and users of their networks, promote commerce and expand the monetary supply of their digital economies. For this airdrop, the protocol designated 15% of the 1.67 billion EIGEN tokens issued. EigenLayer divided the initiative into two seasons. In season 1, 5% of the token supply will be given to users. From this assignment, 90% of tokens can be unlocked once “the new functions are activated and greater decentralization is achieved.” However, they did not announce a date to enable portability in order to “provide clarity on timelines”, these features are planned for the mainnet before September 30, 2024.
Eligible users are those who staked directly with EigenLayer and those who staked via Liquid Restating Tokens (LRT) until March 15. This represents a position in an underlying asset. Unlike traditional tokens, LRTs update automatically to reflect the net value of the underlying asset, including any income or losses. In other words, an LRT is like a digital security that entitles its holder to a portion of the value of an asset. The remaining 10% can be claimed in a second phase of season 1 that will take place in a month and is for those who interacted with EigenLayer in “more complex” ways. To verify airdrop eligibility, you must access a website provided by EigenLayer. Residents of the United States, Canada, Russia, China, Cuba, North Korea, Iran and Venezuela will not be able to receive the tokens and Users who interacted with the protocol using VPN may also not be eligible, which has caused some discomfort among some users. The EIGEN token will have a non-transferable initial period. This—according to EigenLayer—gives time for “further product development and decentralization with community feedback.” After receiving feedback from the community, the protocol announced six days ago that they will add 100 more EIGEN to all users who have interacted with EigenLayer before April 29. This additional amount will be reflected in awards claimed after May 10. All Season 1 users will receive a minimum of 110 EIGEN. Season 2 users who started staking between March 15 and April 29 will also receive the minimum 100 EIGEN.
«Investors and team remain completely locked in for one year after EIGEN is transferable to the community. After that, they will unlock at 4% per month and will finish fully unlocking three years after transfer. “This ensures that users of the protocol gain transfer powers long before core contributors.” EigenLayer statement.
EigenLayer, founded in 2021, is the leading protocol in the re-staking sector, a modality that has become a growing trend in the Ethereum and cryptocurrency ecosystem. This consists of give additional utility to the tokens delivered by liquid staking platforms as proof of deposit of ETH (or other cryptocurrencies). One way to obtain greater profits can be to put those tokens as collateral on a decentralized lending platform and use the money obtained to re-stake Ethereum or other networks. In the case of EigenLayer, it allows users to maintain full control over their assets while participating in staking, using derived tokens such as stETH (Lido); rETH (Rocket Pool) and cbETH (Coinbase). This model offers investors the opportunity to maximize their profits and diversify their participation in the cryptocurrency ecosystem. Additionally, various platforms such as oracles, light and fast node bridges, among others, use their services.