While markets have averted attention away from $ETH in favor of $BTC and $SOL, EigenLayer is bringing eyes back to the original decentralized world computer.
Implications on the Ethereum ecosystem aside, EigenLayer provides ample opportunity for users to earn extra $ETH staking yield, as well as points that may become valuable in the event of an EIGEN airdrop initiative…
Stay alert, stay informed ⬇
News:
- SEC Delays Decision on Ethereum ETFs, Seeks Public Input: The U.S. Securities and Exchange Commission has postponed decisions on several Ethereum-focused ETFs, including Hashdex and Grayscale, and is soliciting public opinions on their potential listings.
- BlackRock's Proposed Bitcoin ETF Assigned Ticker IBIT: BlackRock's upcoming spot bitcoin ETF, now labeled IBIT, moves forward with an updated filing that includes new details on cash redemption and creation mechanisms.
- Circle Introduces Euro-Backed Stablecoin on Solana: Circle has expanded its euro-backed stablecoin, EURC, to the Solana blockchain, enhancing its utility in peer-to-peer transfers and remittances, and joining Ethereum, Stellar, and Avalanche in its network.
- Revolut to Suspend UK Crypto Services Amid Regulatory Changes: Digital bank Revolut plans to pause some crypto services for its UK business clients from January 2024, in response to new Financial Conduct Authority rules, while maintaining the ability for customers to hold and sell crypto.
- Galaxy Digital Eyes Further Acquisitions in Crypto Bankruptcy Space: Galaxy Digital, led by Mike Novogratz, is seeking to acquire more assets from bankrupt crypto firms, following its successful deal to sell bitcoin and ether owned by FTX for the estate's management.
- Crypto Industry Raises $78 Million for Pro-Innovation Political Candidates: A crypto-focused super PAC, supported by Coinbase and other industry giants, has raised $78 million to back political candidates favorable to cryptocurrency innovation, with a focus on the 2024 elections.
- Binance Settles with CFTC, Former CEO to Pay $150 Million: A federal judge has approved a settlement between Binance and the CFTC, requiring former CEO Changpeng Zhao to pay $150 million, as part of a broader $1.35 billion penalty for anti-money laundering violations.
- Tether Collaborates with FBI and Secret Service for Enhanced Security: Tether has onboarded the U.S. Secret Service and FBI to its platform, emphasizing its commitment to security and regulatory compliance, and has frozen 435 million USDT in wallets on the U.S. sanctions list.
- OKX Leads in NFT Trading Volume with $50M: OKX's NFT marketplace surpasses Blur and OpenSea, recording a $50 million trading volume in 24 hours, driven by Bitcoin Ordinals NFTs.
Project Updates:
- EigenLayer Raises Global LST Cap to 500k ETH: EigenLayer has increased its global LST cap to 500k ETH, with six new LSTs joining the ecosystem, signaling a significant expansion in its staking capabilities.
- Solana Saga Phone Fetches $5,000 on eBay: Amidst BONK hype, a Solana Saga phone sells for $5,000 on eBay, with prices soaring due to associated token airdrops.
- Masa to Launch Decentralized Data Marketplace on Avalanche: Masa Finance prepares to unveil a decentralized data network and marketplace on an Avalanche subnet in early 2024.
- MilkyWay Introduces Liquid Staking for Celestia Network: MilkyWay launches the first liquid staking protocol for the Celestia network, offering milkTIA tokens for staked TIA positions.
- Manta Pacific Adopts Celestia's Data Solution: Layer 2 blockchain Manta Pacific integrates Celestia's modular data availability solution to reduce transaction fees.
- MetisDAO Launches $100M Fund for Ecosystem Growth: The MetisDAO Foundation announces a $100 million fund to boost its ecosystem, focusing on various blockchain and DeFi projects.
Alpha from Trace by Revelo
Inflows
- $MUBI leads with over $100k in smart money inflows, despite a ~9% decrease in the last 24 hours and holding a market cap of over $200M. 37.8% or $94M of $MUBI is staked for distribution incentives.
- $DOVA follows with $66k inflows, now at a $10M market cap after a -18% price drop. Dova facilitates borrow-lending of BRCs between Bitcoin and the EVM using the Multibit bridge.
Outflows
- $GEC tops the outflow list with $102k, down 30% today, at a $7M market cap. Recent changes include lowered taxes and staking announcements.
- $BSSB follows with $70k outflows, up 10% today, with a $64M market cap. Bitstable enables minting of the DAII stablecoin against BRC-based assets.
Background on EigenLayer
EigenLayer popularized the term ‘restaking’, a new primitive in crypto-economic security
in a typical proof-of-stake blockchain, people put down a stake and promise to validate the blockchain correctly.
Restaking allows for programmable staking, meaning stakeholders can opt into new protocols and services, thus adding new slashing conditions.
This is beneficial because they receive additional fees for providing these services.
There are 2 sides to restaking:
stakers who can opt into new protocols
service providers who build these new actively validated services.
These services could range from data availability protocols to Oracles to bridges, and beyond.
In addition, there are 2 types of restaking:
native restaking, where you stake in Ethereum and set the withdrawal credentials to the EigenLayer contracts
liquid restaking, which involves depositing a liquid staking token into EigenLayer contracts
In both of these instances, users are essentially being re-rewarded for restaking, earning the native $ETH staking yield + yield from EigenLayer staking
Native vs Liquid Restaking TVL
EigenLayer notably raised $50M in a Series A round led by Blockchain Capital, at a $500M valuation.
More projects are building on top of EigenLayer, and creating Liquid Restaking Tokens (LRTs).
EigenLayer Founder & EigenDA
Sreeram Kannan, Founder of EigenLayer, has extensive academic research, although he has stated that this can often be a limiting factor in crypto.
He states that EigenLayer allows for solutions to various bottlenecks in Ethereum's roadmap.
He highlights data availability services in EigenDA, which increases the total available data bandwidth on Ethereum from 80 KB/s to 10 MB/s.
Some people have expressed around EigenLayers’ impact on Ethereum, including overloading consensus and increasing centralization.
Sreeram says that EigenLayer isn't introducing new risks that don't already exist with simple staking.
He stresses that their goal is to encourage a larger, more decentralized group of people to participate in staking.
EigenLayer Deposit Caps
Yesterday, EigenLayer raised their deposit caps, as they were previously filled.
These increases also came with new deposit pools being opened for:
StakeWise Staked $ETH ($osETH) - ~13K ETH TVL
Swell Staked $ETH ($swETH) - ~43.4k ETH TVL
Origin Staked $ETH ($oETH) - ~6.4k ETH TVL
Wrapped Beacon $ETH ($wBETH) - ~1.1k ETH TVL
Ankr Staked $ETH ($ankrETH) - ~282 ETH TVL
Stader Staked $ETH ($ETHx) - ~27k ETH TVL
Over 80% of the raised deposit cap has been filled in under 24h
While 500k ETH is the cap for LSTs to be deposited, native $ETH is uncapped.
There are opportunities to use LRTs of other projects to gain exposure to EigenLayer yield, accrue restaking points and potentially receive some project specific rewards.
EigenLayer Ecosystem
Swell Network is an LST protocol, with its own LRT on the way.
Users can stake $ETH for $swETH, and earn pearls for minting and holding the LST.
Pearls will eventually be redeemable for the native $SWELL token at TGE.
There are a number of DeFi use cases for $swETH, which bring a pearl bonus.
$swETH can now be restaked on EigenLayer officially for additional rewards, including 30 pearls upong restaking in addition to earning restaking points.
Restake Finance brands itself as the ‘1st modular restaking protocol’, powered by EigenLayer.
The project’s native $RSTK public sale went live yesterday.
$rstETH is currently in beta, with ~$4M in TVL.
Ebisu Money is seizing the opportunity around LRS and LRTfi.
Very little is known about the project thus far, as it's official twitter and telegram accounts have not been active yet and its website is barren.
The project aims to provide higher yields on top of EigenLayer, and provide a yield-bearing stablecoin backed by LRTs.
Renzo is a sophisticated Liquid Restaking Token (LRT) and Strategy Manager built on the EigenLayer platform.
It is designed to streamline and enhance the Ethereum restaking process.
It acts as an interface to the EigenLayer ecosystem, specializing in securing Actively Validated Services (AVSs) while offering yields higher than traditional ETH staking.
Puffer Finance is an LRS protocol aimed at enhancing the decentralization and economic viability of home stakers in Proof-of-Stake (PoS) blockchain networks.
It addresses the challenges faced by small-scale validators by implementing anti-slashing technology, which reduces the risk of penalties associated with validator errors or software bugs.
This technology, exemplified by their open-sourced Secure-Signer, is crucial for protecting home stakers from significant financial losses.
Kelp DAO is a Liquid Restaking Solution (LRS) for public blockchain networks.
Founded by Amitej G and Dheeraj B, who also founded Stader Labs, a multichain liquid staking platform, Kelp DAO focuses on enhancing liquidity and accessibility of staked assets.
The protocol is currently developing a notable LRS product, rsETH, on EigenLayer for Ethereum.
This product aims to convert illiquid assets, like staked Ethereum, into liquid restaked tokens (LRTs), thereby addressing the liquidity challenges in restaking platforms.
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