The Ethereum mainnet recently witnessed the successful launch of EigenLayer, a decentralized finance (DeFi) platform that allows people to restake ether (ETH) and use it to secure other platforms. On the first day of its rollout, all three of EigenLayer’s restaking smart contracts reached their maximum limit of 3,200 liquid staking tokens, pulling in approximately $16 million. This impressive feat highlights the strong demand for the restaking market and has generated keen interest from crypto enthusiasts.
Compared to other Ethereum smart contracts deployed in the past week, these three restaking pools have seen the highest capital inflows, primarily from high-profile “smart money” wallets. The wallets, tracked by blockchain analytics firm Nansen, are known to make consistently profitable trades and represent crypto traders and institutions. Some of the noteworthy depositors into EigenLayer’s stETH, rETH, and cbETH pools include the address that deployed the U.S.-sanctioned Tornado Cash money mixing tool and an address linked to Hassan Bassiri, former vice president of portfolio management at crypto hedge fund Arca.
EigenLayer’s restaking system allows Ethereum stakers to reuse their interest-earning staked ether to extend cryptoeconomic security to additional applications on the network and earn extra rewards. While some may argue that this new system is creating competition for Ethereum capital and resources, others see it as an opportunity to enhance the applications and the overall health of the Ethereum network.
Steven Quinn, the head of research at staking service provider P2P, told CoinDesk that the early inflow of funds into EigenLayer’s smart contracts signifies strong confidence in the EigenLayer team and increased demand for the restaking market. Additionally, it’s worth noting that restaking could potentially boost Ethereum staking’s real yield by expanding its utility and use as collateral to secure additional protocols.
Critics argue that EigenLayer may contribute to unsustainable token inflation and have an impact on DeFi yields. However, Quinn believes that creating healthy competition between real revenue and inflation can benefit the Ethereum ecosystem and its applications in the end.
EigenLayer, which raised $50 million in a Series A funding round in March 2023, has received support from major investors like Blockchain Capital, Electric Capital, Polychain Capital, Hack VC, Finality Capital Partners, and Coinbase Ventures. This further emphasizes the market’s confidence in the platform’s capabilities as it continues to grow and transform the Ethereum mainnet.
Source: Coindesk
