ETH RESTAKING UP BY 6000%! 🔥 But What's Restaking & Why It's Viral? 👇
Ethereum liquid restaking protocols experienced a massive surge in Total Value Locked (TVL), growing from $284 million in January to over $17 billion by mid-December (6,000% increase)! But why recently these restaking protocols are getting huge attention? Because they allows users to leverage their staked ETH in order to earn more rewards on additional blockchains! An example is when you stake ETH on Optimism. This dual staking mechanism optimizes the capital efficiency in order to amplify returns! Amazing Eh? Why Didn't I do it before? WAIT! Off course, there is a trade off if you do earn more APY rather than the traditional stake! Which?
While liquid restaking offers many benefits, it also introduces risks! Events like depegging of derivatives and exposure to cascading failures across interconnected networks can lead to lose your assets! So my recommendation here is to always research platforms while monitoring for systemic risks (e.g security audits, protocol changes, etc). First red flag? APY above 10%. Currently, Ethereum staking annual percentage yields (APY) vary between 3% and 5%. On reliable restaking protocols (e.g $EIGEN ) around 7%!
Overall I find this Defi technology interesting, in particular the increased capital efficiency! Liquid restaking provides liquidity through derivative tokens (LRTs), which can then be deployed in other DeFi protocols, such as lending, borrowing and yield farming.
Do You Currently Restake? Where? 🤔 Let Me Know In Comments!
STAY TUNED! 🔥 & Remember, Your Support Is MASSIVELY Appreciated!👍💪 Also Don't Forget To Share It To Your Buddy! 🎅 - DYOR 🙏 NFA.🤝
