Sep 14, 2024
6thTrade
Utonic, a new restaking protocol on The Open Network (TON), has secured a major $100 million institutional commitment in total value locked (TVL) ahead of its official launch. Leading investment firms, including Mirana Ventures and Foresight Ventures, contributed to this sizable commitment. $TON
The Utonic protocol aims to strengthen TON’s security and decentralization, following a proven path in the restaking space. According to co-founder Lemon Lin, Utonic is inspired by the success of Ethereum-native protocols like EigenLayer, which demonstrated the potential of restaking to enhance network resilience. Lin stated:
"The technical success of restaking, as shown by EigenLayer on Ethereum, can be effectively applied to TON, helping to boost both security and decentralization."
The Rise of Restaking Protocols
Interest in restaking has surged following the remarkable success of EigenLayer. This Ethereum-based restaking protocol crossed $1 billion in TVL by December 2023, and by February 2024, it reached nearly $7 billion, becoming the fourth-largest restaking protocol. Restaking protocols like EigenLayer allow validators and stakers to repurpose liquid staking derivative tokens, such as Lido’s STETH and RocketPool’s rETH, to validate other networks while simultaneously earning additional yields through DeFi applications.
Utonic's Expected Yields: Over 20% Even in Bear Markets
Utonic is expected to offer attractive yields, with an estimated 30% annual percentage yield (APY) upon launch. Even during downturns in the crypto market, Lin projects the protocol will still offer yields exceeding 20% APY. He explained the breakdown:
3.65% APY from native validator yield
An additional 5%–15% APY from Actively Validated Services (AVS)
Extra rewards from farming incentives on Layer 2s, potentially bringing the total APY above 30%.
Even if on-chain liquidity diminishes during a bear market, Utonic remains confident in offering a 20% APY.
Utonic’s Yield Sources
Utonic will allow users to stake their TON tokens and redistribute them across various applications, providing passive income streams. The protocol offers three main yield sources:
Native validator yield
AVS yield, earned by securing Actively Validated Services
Farming incentives, allowing users to earn additional rewards through secondary DeFi activities.
Utonic plans to launch by the end of September 2024.
Growing Interest in Liquid Staking and Restaking
Restaking and liquid staking solutions are gaining momentum across various blockchains. The success of EigenLayer on Ethereum has sparked wider adoption, and similar growth is expected on other networks. For example, Bybit Research predicts that liquid staking on Solana could grow nearly fivefold, reaching $18 billion, driven by retail investors attracted to enhanced liquidity and capital efficiency.
By offering stakers more flexibility and access to liquidity, liquid staking increases the capital efficiency of their investments. Stakers can receive tokens equivalent to their initial staked assets, which they can deploy in other DeFi protocols, maximizing their yield potential. This growing trend highlights the transformative impact of restaking on the broader DeFi ecosystem.
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