Takeaways
Decentralized finance (DeFi) platform EigenLayer had its first-ever restaking smart contracts reach their maximum limits on Wednesday, the same day the much-hyped protocol was deployed on the Ethereum mainnet. The contracts, which allow people to “restake” ether (ETH) and use it to secure other platforms, drew in 9,600 tokens worth more than $16 million.
Compared to other Ethereum smart contracts deployed in the past week, EigenLayer’s three restaking pools – which consist of stETH, rETH and cbETH liquid staking tokens – have seen the highest capital inflows in the past 24 hours from “smart money” wallets tracked by the blockchain analytics firm Nansen.
Nansen’s smart money wallets represent crypto traders and institutions with a history of generally profitable trades. Notable smart money depositors into EigenLayer’s stETH, rETH and cbETH pools included the address that deployed the U.S.-sanctioned Tornado Cash money mixing tool, as well as an address linked to Hassan Bassiri, the former vice president of portfolio management at crypto hedge fund Arca.
EigenLayer’s restaking system lets Ethereum stakers – people who lock up tokens to help operate Ethereum – reuse their interest-earning staked ETH to “extend cryptoeconomic security to additional applications on the network to earn additional rewards,” according to the protocol’s documents. Eigenlayer’s restaking contract limits will be raised over the coming weeks and months, according to the protocol’s Twitter account.
The large early inflows into EigenLayer’s smart contracts represented “a strong signal of confidence in the EigenLayer team and demand for the restaking market,” staking service provider P2P’s head of Research Steven Quinn told CoinDesk.
“Restaking could potentially further boost ETH staking real yield by massively expanding ETH’s utility as collateral to secure additional protocols,” Quinn added. “This is also cementing ETH staking as a very compelling alternative to DeFi yields, which are still largely supported by unsustainable token inflation. Creating competition for ETH capital between sources of real revenue and inflation can only be a good thing for the health of applications and Ethereum itself.”
In March 2023, EigenLayer raised $50 million in a Series A funding round, which saw participation from Blockchain Capital, Electric Capital, Polychain Capital, Hack VC, Finality Capital Partners and Coinbase Ventures.
