The EigenLayer (TVL) protocol’s whole locked worth exceeded $1 billion after staking restrictions had been eliminated to create extra “natural demand” on the community.
Based on EigenLayer, the protocol crew has determined to lift the staking restrict to 200,000 Ethereum (ETH) by Feb. 9 to create “natural demand” on the community. The minutes say this non permanent removing “paves the way in which for a future” the place all betting restrictions shall be eliminated completely.
Based on DefiLlama, following the announcement, the protocol’s TVL elevated from roughly $2.5 billion to almost $3.65 billion at publication as buyers funneled their respective liquid ETH tokens into the protocol. This outsized enhance represents a staggering enhance of $1.15 billion final week.
EigenLayer is an infrastructure element that may strengthen the adoption of ETH staking whereas basically turning it right into a public good that different networks and protocols can use with out ranging from scratch for his or her safety.
EigenLayer is taken into account a brand new use case for ETH staking. Nonetheless, builders have expressed issues in regards to the protocol’s mechanics, describing giant volumes of re-staking as akin to leverage.
Most notably, final Could, Ethereum co-founder Vitalik Buterin warned {that a} vital enhance in re-staking, in addition to over-reliance on knowledge or value oracles, may pose severe “systemic dangers” to the Ethereum ecosystem.