[EigenLayer climbs to second place in DeFi industry]
As of March, EigenLayer’s total value locked (TVL) was approximately $10 billion, with 2.93 million ETH. The recent TVL growth has been attributed to rising deposits and rising ETH prices. EigenLayer’s mainnet launched in April, and the subsequent token distribution program played a key role in attracting more deposits. The innovative re-staking model allows users to deposit ETH and various liquid staking tokens, which are used to protect third-party networks, providing mutual security benefits.
Initially, the protocol faced massive outflows due to community dissatisfaction with low AirDrop allocations and the non-transferability of tokens. This dissatisfaction stems from the linear token distribution model, which many find unappealing. To address these issues, the Eigen Foundation has increased AirDrop allocations for all adopters and clarified the timeline for tokens to be unlocked and transferable, which should help alleviate concerns and increase deposits on the protocol.
After modifying the AirDrop distribution, EigenLayer's deposit volume increased significantly. On May 31 alone, more than $500 million was deposited, indicating a return to investor confidence. Daily net traffic data from The Block shows a significant increase in inflows, further underlining this positive trend. The Eigen Foundation has reserved 15% of the 1.6 billion token supply for user distribution across multiple staking airdrop seasons, and as of March 2024, 5% has been distributed.
- The re-staking model allows for participation in the security of third-party networks.
- Increased AirDrop distribution has a positive impact on user confidence.
- Mainnet launch and token distribution plan significantly attracted new deposits.
- Current TVL and ETH holdings reflect strong user engagement and trust in the protocol.
All in all, EigenLayer’s innovative approach and strategic alignment have made it the second largest DeFi protocol. Significant increases in TVL and user deposits demonstrate growing trust in the platform’s capabilities and its potential for future growth.
