In January, the market cap of liquid re-collateralized tokens surged 140% to $620 million.
Ether.fi, an Ethereum-based liquidity re-collateralization protocol, has seen demand for its eETH token surge over the previous week, with the overall worth locked (TVL) within the protocol almost doubling to $340 million.
eETH is a Liquid Recollateral Token (LRT), a comparatively new asset class that DeFi buyers have been flocking to forward of the mainnet launch of EigenLayer, a protocol designed to leverage Ethereum Fang’s highly effective consensus mechanism validates different functions via a course of known as re-staking.
Since EigenLayer limits deposits of liquid staking tokens however doesn’t set limits on native re-staking, buyers trying to make investments amid the current hype see eETH as a horny native choice.
Customers who re-stake ETH obtain common staking advantages along with receiving rewards from initiatives that select to bootstrap their safety with EigenLayer, thereby forgoing the time and expense related to constructing their very own validator community.
EigenLayer is operating a factors program for future airdrops of its native token, which as of January 22 has resulted in over $1.7B price of ETH and liquid pledged tokens being re-staking.
Nevertheless, as a result of lack of liquidity in re-staking ETH (identical to common staked ETH), a wave of protocols comparable to ether.fi, Renzo and KelpDAO have launched LRT, which permits buyers to retain their re-staking threat whereas gaining deployable Earn further rewards on liquidity tokens throughout DeFi.
For instance, ether.fi proposes to incentivize an eETH-ETH market on the lending and borrowing protocol Morpho. Such a market would allow merchants to borrow ETH towards eETH and allow extra aggressive methods comparable to “looping” to achieve extra EigenLayer publicity.
The nascent mild rail business now has a goal worth of $620 million, up from $200 million a month in the past.
