$1B after EigenLayer TVL rockets for the time being
EigenLayer's total-value lock (TVL), an Ethereum-based liquidity restoration protocol, raised an impressive $1 billion in eight hours after the protocol temporarily removed its value cap.
In the year The protocol said this temporary removal “paves the way for a future” permanent removal of all stockpiles.
EigenLayer Reloaded!
From now until February 9th, 12 PM PT, re-enter the world of LST Reboot! All pools are fully uncapped, welcoming both existing pools and new partners @fraxfinance, @liquid_col and @0xMantle. pic.twitter.com/yDGHiJjX3m
— EigenLayer (@eigenlayer) February 5, 2024
In the eight hours following the announcement, the protocol's TVL rose from $2.5 billion to $3.58 billion at the time of publication as investors poured their liquid ETH tokens into the protocol. This exorbitant growth last week saw a staggering $1.6 billion increase.
EigenLayer is a protocol that allows investors to earn more on their held ETH tokens by securing other networks. EigenLayer currently supports liquid staking tokens such as Lido DAO's staked ETH (stETH) and Swell Stated Ether (swETH).
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Lido Staked ETH is currently the most returned token on EigenLayer with a total TVL of EigenLayer worth over $1.2 billion. Swell Staked ETH is the second largest in the protocol with a total TVL of $392 million.
Repository works by giving investors interest in locking in their liquid stocking tokens and using the tokens to facilitate verification, lending and liquidity on other blockchain networks.
EigenLayer is widely touted as offering a new use case for stakeholder-owned ETH tokens, but market analysts and developers have raised concerns with the protocol's mechanics, stating that the high amount of reversion is synonymous with utility.
In May 2023, Ethereum founder Vitalik Buterin warned that a significant increase in reprocessing, as well as excessive use of data or price oracles, would introduce major “systemic risks” to the Ethereum ecosystem.
EigenLayer's testnet was launched on April 7, 2023, and the protocol's mainnet was launched two months later on June 14. Since then, the protocol's TVL has grown an impressive 21,623%, indicating its resurgence among the broader crypto market.
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