Original author: Grapefruit, ChainCatcher
Original editor: Marco, ChainCatcher
Within one month, Binance Launchpool has launched two consecutive restaking projects, Etherfi and Renzo. Among them, the latest Renzo (REZ) new coin mining will end on April 30 and start trading online. The assets involved in the staking exceeded US$15 billion and the number of users exceeded 400,000. The enthusiasm for participation is unprecedentedly high.
Since the beginning of 2024, the re-pledge track has been favored by capital, and projects that have received tens of millions of dollars in financing have been one after another. In the second half of this month, the re-pledge track received two large financings again. First, on April 16, the re-pledge agreement Puffer completed a $18 million Series A financing with a valuation of $200 million, and then on April 23, the liquidity re-pledge agreement YieldNest completed a new round of financing of $5.2 million.
Driven by favorable sentiments such as frequent capital support, projects launching Binance new coin mining one after another, and airdrops one after another, the re-staking track has become a new gold-digging holy land.
Restaking refers to pledging ETH that has been staked on the Ethereum PoS chain for a second time to provide verification services in other blockchain networks in order to obtain income in addition to the PoS staking income provided by the Ethereum mainnet.
Simply put, Ethereum stakers can use the staked ETH for staking on other PoS networks a second time, and obtain double staking benefits on the Ethereum mainnet and other networks.
Since Ethereum switched to the PoS mechanism, more than 32.5 million ETH have been staked in the Ethereum mainnet, accounting for more than 26% of the ETH supply and worth more than US$100 billion.
Common liquidity staking protocols (LST protocols) such as Lido and Rocket Pool have released the ETH liquidity pledged on the Ethereum mainnet through the pledge certificate LST assets, but they cannot be used as pledge assets for other networks.
The re-staking protocol hopes that the ETH staked on Ethereum can be used again to protect the security of other blockchain networks and unlock new profit opportunities for ETH stakers, thereby activating the staked ETH while achieving greater utility.
From this point of view, the re-staking protocol has built a pledge asset platform market for ETH pledgers. The network or DApp developers with pledge and verification are the demand side, and the ETH pledgers are the suppliers of pledge assets. Through this market, users can re-stake their ETH or LST assets pledged on Ethereum to other networks to obtain more returns.
As of April 29, the value of ETH and LST assets locked on the EigenLayer platform, the pioneer of the re-staking track product, has exceeded US$16 billion.
Around the tens of billions of dollars of liquidity on the EigenLayer platform, multiple liquidity re-staking LRT protocols have been derived, such as Etherfi, Renzo, etc. These products simplify the complex re-staking process of EigenLayer, allowing users to participate in staking by simply depositing ETH or LST assets, without having to pay attention to the node operation selection behind it.
At present, the re-pledge products on the market can be divided into two categories according to the logic of the products: one is the native re-pledge protocol, such as EigenLayer; the other is the LRT protocol built around the re-pledge protocol, such as Etherfi, Renzo, etc.
EigenLayer: The creator of the re-staking protocol
Eigenlayer is the originator of the concept of restaking, which supports users to restake their LST assets to obtain staking income other than Ethereum PoS.
On April 10, EigenLayer announced that it had launched its mainnet.
According to Rootdata data, Eigenlayer has publicly completed three rounds of financing, with a total financing amount of US$164.5 million. Among them, a16z announced in February this year that it would inject US$100 million into it.
On the EigenLayer platform, there are three main roles: pledgers who provide ETH or LST assets, node service solutions (AVS), and application chains and DApps with pledge requirements.
Among them, the node service solution AVS stands for Actively Validated Services, which is the core concept of EigenLayer. It is a node service solution and system that provides security and decentralization for block networks or DApp projects. Users can regard it as a middleware that connects Ethereum pledgers or LST asset holders with project parties that have node service needs, provides node operation and verification services for project parties, and then extracts income from the node rewards and handling fees provided by the project parties.
EigenLayer provides node operator services. Project parties such as application chains or cross-chain bridges, oracles, Rollups, etc. no longer need to consider the construction of nodes from 0-1 and subsequent operations. They can directly rent EigenLayer's node verification services, which can save time and resources to focus on doing what they are better at.
In addition to node services, EigenLayer has also developed an availability data DA service EigenDA, which is used to handle data availability, transaction execution, etc. Its functions are similar to the data availability layer Celestia of the modular blockchain.
At present, there are multiple application chains and Layer 2 that use or integrate EigenLayer's AVS service and EigenDA data availability layer, such as Layer 2 networks Mantle, Cyber, and Layer 2 developed by Celo and Treasure, all of which use EigenDA services; Rollup service solutions AltLayer, Brevis, Xterio, etc. use AVS validators.
Users can participate in re-pledge on EigenLayer in two main ways: one is to directly pledge ETH; the other is to use LST pledge certificate assets to participate in direct re-pledge. Currently, LST assets that support pledge include stETH, swETH, mETH, stETH, wbETH, rETH, etc.
On April 16, EigenLayer announced the removal of all LST token deposit limits, and TVL increased by $3 billion in a week. Currently, users can earn points by staking ETH or LST on EigenLayer.
As of April 29, the value of ETH and LST assets locked on the EigenLayer platform is close to $16.2 billion, accounting for more than 15% of the total ETH pledged, of which 3.26 million are native ETH, and the rest are LST assets such as stETH, rETH, and cbETH. Among them, EigenLayer distributed about 4.5 billion points to all re-stakers, and the transaction price of each EigenLayer point on the over-the-counter market Whales Market is $0.14.
LRT protocol simplifies the EigenLayer staking process
Since the product mechanism of the EigenLayer platform is relatively complex, and users need to select the projects they want to participate in and perform relevant node selection operations when participating in the re-staking AVS node service, this increases the difficulty for users. The LRT protocol, a one-stop staking platform built on EigenLayer, was born.
Users only need to deposit ETH or LST assets into the LRT protocol, which can help users re-stake on EigenLayer, similar to the machine gun pool or yield aggregator in the DeFi protocol. Users can choose to re-stake through the LRT protocol platform without directly participating in the complex staking process.
After staking ETH or LST assets on the LRT platform, users will receive an LRT re-staking certificate asset (Liquidity Restaking Token), which can not only be traded freely on the market, but can also be used for staking lending, LP, etc. in DeFi applications to further increase returns.
Although it looks similar to LST, LRT assets truly achieve "killing two birds with one stone", including dual staking income and multiple platform token and point rewards: staking income of the Ethereum mainnet + node rewards for re-staking AVS services + token reward income of the LST platform + points or token rewards of EigenLayer + token or point rewards of the LRT platform.
Currently, the projects represented in the LRT track include: Renzo, Ether.fi, Kelp DAO, EigenPie, YieldNest, Swell, Pendle Finance, etc.
1. Renzo
Renzo is a liquidity re-staking protocol built on EigenLayer. It simplifies the complex re-staking mechanism for users and operates EigenLayer re-staking related services on their behalf. Therefore, users do not need to understand, select and manage node operation AVS services and their reward strategies, and can directly participate in EigenLayer re-staking.
Users only need to deposit their ETH and LST assets on the Renzo platform, and they will receive a re-staking certificate ezETH. Holding ezETH can obtain Ethereum PoS staking income and other AVS node service income.
In January this year, Renzo completed a $3.2 million seed round of financing at a valuation of $25 million, and in February announced that it had received investment from Binance Labs. On April 23, Binance announced that Renzo (REZ) became its Launchpool new coin mining project and announced the REZ token economic model. The total supply of REZ will be 10 billion, and the circulating supply at the time of listing will be 1.05 billion. It will be officially launched for trading on April 30.
During this period, Renzo launched the early points reward program ezPoints. Users can obtain ezETH by locking ETH or LST assets and obtain points ezPoints, and can also obtain EigenLayer points.
As of April 29, the value of Renzo’s locked assets has exceeded $3.51 billion, EigenLayer has issued more than 930 million points, and Renzo ezPoints has issued 1.53 billion.
Compared with other LRT protocols, Renzo's advantage lies in its early support for multiple Layer networks such as Arbitrum, Base, Blast, BNB Chain, Mode, Linea, etc., and users can participate in re-staking in the form of Gas.
2. Ether.fi
Ether.fi was originally the liquidity pledge protocol LST on Ethereum. After integrating the EigenLayer re-pledge protocol in November last year, the scale of assets locked on the protocol entered a rapid growth stage, rising from tens of millions of US dollars to 3.86 billion US dollars, and TVL is currently ranked first in the LRT track. Its token ETHFI was launched on Binance Launchpool in March, with a total supply of 1 billion and a current price of US$4.44.
According to Rootdata data, Ether.fi has publicly raised two rounds of financing, totaling US$32.3 million. The most recent round was on February 28, when it raised US$27 million led by Bullish and CoinFund.
Currently, users who stake ETH or LST assets on Ether.fi will receive re-staking certificates eETH and obtain EigenLayer points. The platform has issued more than 1.1 billion EigenLayer points.
Compared with the native LRT protocol, Ether.fi has its own Ethereum PoS staking service and has been working hard to solve the decentralization problem of staking. On April 22, SSV.Network announced that it would cooperate with ether.fi to launch the latest distributed verification technology (DVT) integration, hoping to avoid the centralization problem of staking node operation through diversified solutions.
3. Puffer finance
Similar to Ether.fi, Puffer finance was originally a liquidity staking LSD platform on Ethereum. It lowered its staking validator startup threshold from 32 ETH to below 2 ETH, received funding from the Ethereum Foundation, and provided more AVS income to staking users by integrating EigenLayer.
According to Rootdata data, Puffer Finance has publicly conducted four rounds of financing, with a disclosed cumulative financing amount of US$21.45 million. On April 16, it announced a financing of US$18 million at a valuation of US$200 million.
In January this year, Puffer Finance announced the launch of a staking points reward program, indicating that users can obtain Puffer and EigenLayer points rewards by staking assets such as ETH, stETH, USDT and USDC. However, Puffer Finance currently only supports users to deposit stETH and wstETH.
On April 29, Puffer Finance's TVL was US$1.41 billion, with approximately 2.44 billion points issued, and EigenLayer had issued 650 million points.
4. YieldNest
YieldNest is a liquidity re-staking protocol supported by EigenLayer. The product is still in the testing phase and users can only participate in the early Discord community.
On April 23, YieldNest announced the completion of a new round of financing of US$5.2 million.
5. Kelp DAO
Kelp DAO is a liquidity re-pledge protocol based on EigenLayer built by team members of Stader Labs, a multi-chain liquidity staking platform. Users can pledge ETH and LST assets such as stETH and sfrxETH on the platform to obtain their re-pledge certificate rsETH.
Unlike other LRT protocols, Kelp DAO launched the EigenLayer Points (EL Points) token KEP, which supports the exchange of EL points for KEP tokens in a 1:1 manner, that is, 1 KEP = 1 EL point. KEP Points tokens can be traded in the secondary market and can also be used in other DeFi applications, such as forming LPs.
Currently, users can obtain EL points and Kelp Grand Miles by locking up ETH and LST assets on the Kelp DAO platform. On April 2, Kelp launched the "Billion Miles" campaign, which will award an additional 5 million EL points to users who mint rsETH.
As of April 29, Kelp DAO has locked up $863 million in TVL, earned 438 million EigenLayer points, accumulated 370 million Kelp Grand Miles reward miles, and claimed over 50 million KEP points tokens.
6. EigenPie
Eigenpie is an EigenLayer-based LRT protocol created by the multi-chain yield protocol Magpie community subDAO, which supports users to pledge LST assets to obtain LRT re-pledge certificates.
In the early days, Eigenpie mainly focused on the re-pledge of LST assets, and issued corresponding LRT assets for each LST asset separately to isolate the risks between different LST assets.
However, on April 26, Eigenpie announced that it now supports ETH re-staking. Currently, users can obtain Eigenpie and EigenLayer points by staking ETH or LST assets on the platform. As of April 29, the TVL of the Eigenpie platform is US$323 million.
7. Swell
Swell is also a liquidity pledge protocol LST on Ethereum. Users can pledge ETH to obtain LST liquid pledge certificate swETH. In January this year, it announced the launch of rswETH, a LRT product based on EigenLayer's re-staking service.
Currently, the Swell website also displays these two products, LST’s swETH and LRT’s rswETH. The former manages assets of more than US$700 million, while the latter has a TVL of US$398 million.
In March, Swell announced the launch of its own Rollup network Swell L2, a Layer 2 network built specifically for re-collateralization, which will use rswETH as the native GAS token on its chain and is expected to be launched in the second half of 2024.
In addition, Swell launched the Swell L2 pre-deposit activity in April and made it clear that participating users will receive SWELL airdrops when L2 is launched. Currently, it supports deposits of ETH or LST, LRT and other assets, and the assets deposited have reached US$379 million.
8. Pendle Finance
Pendle Finance (Pendle) was originally a DeFi income protocol on Ethereum, which split the principal and income of interest-bearing assets, and then tokenized them to meet the investment needs of different users.
With the development of the LST and LRT tracks, the scale of assets managed by the Pendle Finance platform has entered an explosive growth. The current TVL is 4.41 billion US dollars, ranking in the top 7 in the entire DeFi application. The token PENDLE has risen by more than 50% in the past 30 days and is currently quoted at 5.5 US dollars.
In Pendle, interest-bearing assets are divided into two parts, one is the principal of interest-bearing assets PT (Principal Tokens), and the other is the yield of interest-bearing assets Yield Tokens (YT). YT and PT can be traded on Pendle AMM, and users can purchase assets at a discount, participate in various yield strategies, or earn income by providing liquidity to the fund pool.
Pendle Finance now supports LRT re-collateralized certificate assets such as ezETH, eETH, and pufETH, splitting their potential points income into YT-Token tokens and the principal into PT-Token tokens. Users can then choose to hold the income or sell it for direct cash based on their risk tolerance and future expectations.
Take the LRT asset ezETH on Renzo for example. Pendle Finance splits its potential points income into YT ezETH and the principal is PT ezETH. Users can then trade these tokens freely. For example, if they are optimistic about future points income, they can buy YT ezETH. If the expectations are not good, they can choose to sell them directly for cash.
Additionally, Pendle Finance distributes EigenLayer points and Renzo points to users who hold YT tokens backed by ezETH (YT-ezETH).
EigenLayer Competitor Karak Network
Karak Network is a re-staking protocol created by developer AndalusiaLabs (formerly the asset risk insurance service provider of the LUNA protocol). The working principle is similar to the Eigenlayer protocol, which supports users to stake ETH that has been staked on Ethereum in other blockchain networks, and obtain staking income in multiple ecosystems with one staking cost.
In December last year, it completed a US$48 million Series A financing round with a valuation of US$1 billion. Investors included Pantera Capital, Framework Ventures, Digital Currency Group, Coinbase, Nima Capital, etc.
The difference between the two is that Eigenlayer calls the process of using the re-staked ETH to serve the security of DApp AVS (Active Verification Service), while the Karak platform calls the process Distributed Security Service (DSS).
In addition, Karak supports more types of assets for re-pledge, hoping that any asset can be re-pledged . Currently, in addition to ETH and LST assets, there are also LRTs such as ezETH and pufETH, and stablecoins such as USDT, USDC, and DAI. It is reported.
Karak has also developed its own Layer 2 network, K 2, which has been launched on the mainnet.
In February this year, Karak launched KarakXP, an early user points reward program, which is invitation-only. Users can cross-chain assets such as ETH and USDC to Karak to earn XP. However, this did not attract much attention in the market, and the data did not change significantly. It was not until the launch of Private Access on April 8 that TVL began to surge and attracted users' attention. Now TVL has increased to 490 million US dollars.
Currently, users who stake assets on Karak can enjoy "killing two birds with one stone": earning PoS staking rewards + re-staking rewards + Eigenlayer points + LRT protocol points + Karak XP . For example, if you stake Renzo's ezETH on Karak, the rewards you will receive are: Ethereum PoS staking rewards + Karak platform re-staking rewards + Eigenlayer points + Renzo protocol points + Karak points XP. However, currently, you need an invitation code to participate in staking on the Karak platform, and each address has only 5 invitation codes.
In addition, the ability of the re-staking protocol to attract DApps or blockchain networks to integrate AVS/DSS is one of the important indicators of future potential, because more AVS/DSS DApps mean that re-staking participants will get higher returns (more airdrops), protocol revenue, token valuation, and TVL will also be higher. Currently, Eigenlayer has multiple AVS partners, but Karak has not yet publicly announced the project of cooperation. The official said that it will be announced in the next few weeks.
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