Ethereum’s new narrative: Liquidity re-hypothecation driven by EigenLayer

Author: DODO Research

Today Dr. DODO will take you to understand which projects in the Liquid Restaking service are worthy of your participation , this article will focus on four projects whose products have been launched but have not issued coins.

The Ethereum ecosystem, which has been weak for a long time, is finally about to usher in a new wave of narratives. In addition to benefiting many L2 Cancun upgrades (DenCun upgrade), The staking trend became the focus of the Ethereum ecosystem as EigenLayer opened to increase the LST mortgage limit at the end of last year. EigenLayer attracted more than 500,000 $ETH in just one month, and TVL exceeded 1 billion US dollars. Now it has reached 1.4 billion US dollars. It is currently Ethereum TVL ranks 12th among the king-level projects, and the first AVS using EigenLayer verification service - EigenDA is about to go online. The narrative of the DA service has also become a topic of market attention with the skyrocketing of Celestia's token $TIA, and EigenLayer is not only itself Being independent, it also brings a new track Liquid Restaking Defi (LRD)/Liquid Restaking Token (LRT) liquidity re-pledge service. As the name suggests, LRD's project is to release the LST (stETH, swETH, ETHx) flow stored in EigenLayer. It helps users release liquidity by issuing mortgage certificate tokens (LRT), forming a new round of token nesting dolls.

Today Dr. DODO will take you to understand which projects in the Liquid Restaking service are worthy of your participation. This article will focus on Among the four projects whose products have been launched but have not issued coins.

What is Restaking?

As early as half a year ago, Dr. DODO I have introduced EigenLayer and its concept of Restaking to you. Simply put, it is an additional layer of income for the Ethereum pledged in POS.

After understanding EigenLayer, let’s explain the derivatives project under the Restaking narrative, citing Delphi Digital’s Picture, you can have a good understanding of the four types of Restaking:

• LSD Restaking:Deposit the LST (stETH, swETH, etc.) you get after depositing into the LSD protocol into EigenLayer and then pledge.

• Liquid-LSD Restaking: Delegate LST to the LRD protocol through the LRD protocol such as KelpDAO, etc. The protocol instead deposits EigenLayer and then pledges it, and the user gets the mortgage certificate token Liquid Restaking Token (LRT).

• Native Restaking:Native restaking means that pledgers who operate native nodes can also transfer ETH Provided to EigenLayer for re-pledge.

• Liquid Native Restaking:Native liquid restaking refers to, for example, etherf.fi or Puffer Finance. This type of project provides small ETH node services, providing the ETH in the node to EigenLayer and then staking

KelpDAO

KelpDAO is a Restaking ecological project made by the LSD project Stader Lab, as above What the article mentioned belongs to the Liquid-LSD Restaking 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. In addition, the official has also made it clear Users who deposit into KeplDAO will be able to receive EigenLayer point rewards. The current protocol TVL exceeds 160M, making it the project with the highest TVL in the LRT field.

Source: kelpdao.xyz /retake

Renzo

Renzo is different KelpDAO is a Liquid Native Restaking type product, which means that deposits are still possible without being restricted by the EigenLayer LST deposit limit. However, it should be noted that the ETH deposited in Renzo is not currently open for redemption, and the mortgage certificate ezETH is not open for redemption. Being able to transfer in the short term is a lock-up. The same team as KelpDAO also stated that users will be able to obtain EigenLayer points. However, the current team background or financing information has not been disclosed. Early projects need to pay attention to risks.

Source: https:/ /www.renzoprotocol.com/#what-is-renzo

Swell

Swell Network is an old LSD protocol. This time it also officially announced that it will enter the field of Liquid Restaking. It is also a Liquid Native Restaking type product and will not be subject to the EigenLayer LST quota limit. Because Swell's unissued currency has airdrop expectations, so its LST token swETH has been favored by many airdrop hunters and is currently the second largest pledged asset in EigenLayer.

Source: Binance Research https ://public.bnbstatic.com/static/files/research/monthly-market-insights-2024-01

Currently only LSD products are open Some of them are open for staking, depositing ETH to get swETH tokens, while the Liquid Native Restaking product is not yet open for staking ETH to get rswETH.

Source: https:/ /x.com/swellnetworkio/status/1743204726777450672?s=20

ether.fi

< p style="text-align: left;">ether.fi is the same as the above two projects. It is also a Liquid Native Restaking type product. It has received US$5.3 million in seed round financing participated by BitMEX founder Arthur Hayes. It is different from LIDO, ether.fi adopts a decentralized, non-custodial method to implement ETH staking, and announced the provision of re-pledge services. Since it is native ETH re-pledge, it is not affected by the EigenLayer LST limit and can still be deposited. Its mortgage certificate token eETH (wrapped token weETH) is also one of the few liquid LRT mortgage certificate tokens at present.

Source: https:/ /www.ether.fi/

The author's opinion

The author thinks that 2024 Q1 After the official launch of the Bitcoin spot ETF, the Ethereum ecosystem is expected to rebound, and three major narratives will be the main theme of the Ethereum ecosystem. The first is the Ethereum second-layer ecosystem that is directly beneficial to the Cancun upgrade, and the second is today’s The EigenLayer re-staking ecosystem introduced, the third one is the Web3 application project (games, payments, etc.) for Mass Adoption, and the Liquid Restaking project introduced today is the most cost-effective way to participate in the EigenLayer re-staking track. You only need to transfer ETH Deposit the relevant agreement to participate in one fish and eat more.

In addition to the four projects introduced above, there are currently many others in preparation. For example, Puffer Finance, which Dr. DODO also introduced previously, has also recently announced We will participate in re-staking, but since its products have not yet been launched, we will not introduce them in this article. However, you can also always pay attention to other projects in this track and participate moderately with controllable risks, and perhaps wait for the relevant agreement to issue coins. will be able to make profits.