• Sat. Apr 13th, 2024

Rising ETH Restaking Causes EigenLayer TVL Surge: What To Know

Steve Kornacki

BySteve Kornacki

Feb 9, 2024
Rising ETH Restaking Causes EigenLayer TVL Surge: What To Know

The EigenLayer TVL Spike

Ethereum-based restaking protocol EigenLayer has surpassed Uniswap’s and other top similar projects’ total locked value (TVL). According to data from DeFillama, EigenLayer’s TVL experienced a 171% surge over the past month alone, causing a spike in its total value locked to $5.67 billion.

This surge has propelled EigenLayer to become the fifth-largest protocol by TVL in the DeFi space. In contrast, traditional DeFi giants such as Uniswap saw a more modest increase in TVL, with a mere 6% uptick to reach $4.31 billion during the same period.

Other notable DeFi protocols, particularly Aave, Lido, and Maker, also recorded relatively subdued growth rates of less than 10%. EigenLayer’s rapid ascent can be attributed to the reopening of its vault for deposits earlier this week, which triggered a significant influx of ETH onto the platform.

In less than seven days, ETH held on EigenLayer increased from 941,000 to 2.3 million, constituting roughly 2% of Ethereum’s overall circulating supply. Blockchain analytics firm SpotOnChain revealed that the top four restakers on EigenLayer include prominent entities such as the Tron network founder Justin Sun, Puffer Finance and Kelp DAO.

However, Puffer Finance leads the pack with 233,600 ETH restaked. Sun closely follows with approximately 109,300 ETH, while Kelp DAO has restaked 75,300 ETH.

EigenLayer’s Ascendence

EigenLayer, since its inception in June 2023, has steadily increased its deposit limit through a phased launch strategy, solidifying its position as a leader in the restaking market. The protocol’s backing of widely-used liquid staking tokens like rocket pool ETH (RETH) and lido-staked ETH (stETH) restaking has heightened its attractiveness to investors seeking extra rewards on their staked ETH.

Murathan, a member of the DeFi collective, pointed out that approximately one-quarter of validators joining the Ethereum validator queue are opting to use EigenPod for their withdrawals. This development further solidifies EigenLayer’s status as the favored option for ETH restaking among crypto enthusiasts.

Despite its remarkable success, EigenLayer has not been immune to scrutiny. Some community members have raised concerns about the protocol’s model. Some also fear that EigenLayer’s exponential rise in TVL could indicate a Ponzi scheme, prompting calls for closer regulatory oversight.

COTI’s MPC Integration Sparks Market Surge

To bolster privacy and security within Ethereum’s Layer 2 ecosystem, COTI has successfully integrated its Multi-Party Computation (MPC) protocol. This achievement heralds a new era of enhanced confidentiality for decentralized applications (dApps) built on the Ethereum network.

Following the announcement, COTI’s token price surged by 55%. MPC, a sophisticated cryptographic tool, allows multiple parties to collaborate on computations using their private data without divulging that information to one another. COTI’s successful implementation of the MPC protocol is the first in a series of technical objectives leading to the full deployment of COTI V2.

Understanding COTI V2 Architecture And MPC Integration

The architecture of COTI V2 revolves around MPC technology, ensuring the privacy of Layer 2 computations on Ethereum while maintaining the confidentiality of data inputs. Participants provide encrypted data to an MPC “black box,” which executes specific computational processes.

The results are delivered in a manner that safeguards data integrity, even under external scrutiny. Every MPC entity, known as an “MPC endpoint,” will eventually integrate into the execution module of the project’s native Extended-EVM.

Incorporating MPC into COTI’s architecture represents a significant step forward in on-chain privacy and security. However, users must first submit encrypted data for safe storage and then submit workloads in secure MPC bytecode to facilitate the MPC’s use.

Future Plans

In testing the MPC modules, COTI simulated a state wherein they collaboratively generated a ‘garbled circuit,’ a cryptographic concept representing a specific computational function with inherent security features. According to a COTI blog post, developing a secure MPC protocol is the beginning of many milestones the COTI development team plans to achieve this year.

Steve Kornacki

Steve Kornacki

Steve Kornacki, a respected author at Big Trends Signals, uses his deep online trading acumen to create comprehensive guides and balanced reviews, empowering traders in their digital pursuits.

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