EigenLayer, the Ethereum blockchain protocol, topped $10.5 billion in TVL before the Denkun update.
EigenLayer, a storage protocol built on the Ethereum network, has reached $10.5 billion in total value locked (TVL), up 23.5% in the last seven days and more than 360% in the month, according to data from Defilama. The data shows that the protocol's TVL was about $2 billion at the beginning of February.
The protocol's TVL has increased by over 360% in the past month.
With this huge increase, EigenLayer has become the second largest DeFi protocol after Lido Finance. Lido's TVL currently sits at over $34 billion, up around 15% from last week and up 56% for the month.
Great apps for EigenLayer
Additional data shows that WETH accounts for more than 41% of the total assets sent to EigenLayer and stETH accounts for more than 32%. Other tokens share a smaller portion. Tokens currently supported by EigenLayer include Lido's stETH, RocketPool's rETH, Coinbase's cbETH, Stakewise's sETH, Mantle's mETH, Frax's sfrxETH, Ankr's ankrETH and Binance's wBETH to name a few.
EigenLayer is a pioneer in resurfacing, a trend that has emerged since the beginning of this year. Simply put, restocking is the recycling of ETH and Ethereum liquidation tokens stored at ATMs and other platforms to improve security.
In February, EigenLayer announced that it had successfully raised $100 million in a Series B round from 16z Fund. Previously, in March 2023, the protocol was reported to have raised $50 million from Blockchain Capital, Coinbase Ventures, Polychain Capital and several other funds.
EigenLayer has not issued tokens yet, but the group's leaders told Bloomberg they are open to issuing tokens.
As EigenLayer gains traction, its related projects like Ether.Fi, Kelp DAO, and Puffer Finance will also experience growth. Kelp DAO recently launched EigenLayer users based on reward points measured by protocol activities. Ether.Fi announced today that it is partnering with Omni Network in a $600 million deal to enhance the security of EigenLayer's replication model.
Protocols powered by Ethereum are set to benefit from the Denkun update.
The Ethereum Denkun update is set to go live on March 13. This is one of the biggest reforms since last year's Shanghai reforms. Denkun's update is expected to bring a number of key improvements that will benefit not only Ethereum, but the projects built on top of it, especially liquid staking, reshoring, and cross-chain protocols.
The two main components of Denkun's update are EIP-4788 and EIP-4844, which aim to reduce risks by enhancing security for dApps. In addition to the security aspect, these proposals also target fee reduction in layer 2 protocols such as Arbitrum and Optimism, which may encourage more users to engage with the blockchain.
Liquid staking protocols such as Lido Finance and Rocket Pool are among the names that could use the Denkun update. In the past year, the liquid staking segment has seen increasing adoption with the potential to reach billions of dollars in value.
The total value (TVL) of projects in this segment, as seen in the Defilama report, increased by 300% last year.
After Ethereum successfully deployed The Merge, liquid stake protocols such as Lido, Rocket Pool, SSV, and Stader became familiar names to investors in the industry, switching from proof-of-work to proof-of-stake to unlock stored ETH after the Shanghai Update in April 2023. This activity may continue after Denkun.
Another group that could benefit from Denkun's upgrade are the stable projects, common names are EigenLayer, Swell, Ether.Fi and Kelp DAO.
As a result, a wave of new DeFi derivatives products have arrived, allowing users to reuse their held assets. For example, Lybra Finance and Prisma Finance are currently offering products to ETH depositors, while veterans like Abracadabra are showing signs of moving into liquid deposits.
According to CoinMarketCap data, Ethereum (ETH) is nearing $3,600 amid Bitcoin's price rally earlier today. At press time, ETH was around $3,560, up about 2% in the last 24 hours.
