crypto.news
The EigenLayer (TVL) protocol’s total locked value exceeded $1 billion after staking restrictions were removed to create more “organic demand” on the network.
According to EigenLayer, the protocol team has decided to raise the staking limit to 200,000 Ethereum ($ETH) by Feb. 9 to create “organic demand” on the network. The minutes say this temporary removal “paves the way for a future” where all betting restrictions will be removed permanently.
🟦 EigenLayer Restaking Reloaded! 🟦
— EigenLayer (@eigenlayer) February 5, 2024
From NOW until Feb 9th, 12 PM PT, dive back into the world of LST restaking! All pools are fully uncapped, featuring both the existing pools and welcoming new partners @fraxfinance, @liquid_col, & @0xMantle. pic.twitter.com/yDGHiJjX3m
According to DefiLlama, following the announcement, the protocol’s TVL increased from approximately $2.5 billion to nearly $3.65 billion at publication as investors funneled their respective liquid $ETH tokens into the protocol. This outsized increase represents a staggering increase of $1.15 billion last week.
EigenLayer is an infrastructure component that will strengthen the adoption of $ETH staking while essentially turning it into a public good that other networks and protocols can use without starting from scratch for their security.
EigenLayer is considered a new use case for $ETH staking. However, developers have expressed concerns about the protocol’s mechanics, describing large volumes of re-staking as akin to leverage.
Most notably, last May, Ethereum co-founder Vitalik Buterin warned that a significant increase in re-staking, as well as over-reliance on data or price oracles, could pose serious “systemic risks” to the Ethereum ecosystem.