Restaking has been growing fast, with over $15 billion in total value locked across all restaking protocols. To put that into perspective, the total DeFi TVL as of October 2024, is $104 billion, according to DeFi Llama.
Most of that TVL was captured by one big player – EigenLayer. In just under a year, the protocol gathered more than $12 billion in ETH deposits. At its peak, EigenLayer held almost $20 billion in ETH, raising questions about Ethereum’s decentralization.
Now, the protocol has officially launched its token with a massive airdrop that broke the charts. In today’s article, we’ll take a look at what EigenLayer is doing and why we think their airdrop will be the most successful one of 2024. Enjoy!
Big Airdrops Are Failing
Out of the 8 most awaited airdrops in 2024, only two of them were successful. The rest performed horribly, showing an average of -50% after the airdrop. Why is that? Let’s take a look.
Starknet
Starknet was the first big protocol to launch its airdrop in 2024. On 20 February, Starknet distributed over 780 million STRK tokens to its users, making a great debut for such an established project.
However, the token is down 80% since the airdrop. Why? Because the airdrop was surrounded by a big controversy. The issue arose when it was revealed that the token was created in November 2022, but the original one-year vesting period was delayed until April of this year.
ZKSync
ZKSync is another big project that launched its token through an airdrop this year. Despite showing good numbers right after the airdrop, ZK is now down more than 60%. The biggest problem of the project is the fact that the chain is bleeding users.
In the last 5 months, daily active addresses have plummeted by 79.7%, reaching their lowest levels of the year. In September, the network had around 92,620 active addresses, a significant decline from the peak of over 455,000 in April.
Another major factor was the airdrop itself. More than 55% of the wallets that received tokens sold them immediately. Many customers claimed that they had not received any tokens even though they were eligible to. Clearly, the airdrop was messy and not thought through.
Hamster, Dogs, Citizen
These Telegram mini-apps gathered a massive non-crypto audience, making them a unique phenomenon in the Web3 world. However, this non-crypto audience is the thing that killed their airdrop.
First, most of the tokens were sold immediately, as people only played these games for profit. This plummeted the price of HMSTR, DOGS and CATI by more than 40% each.
The communities, especially the Hamster community, were disappointed by the airdrop. The games are actively losing users now, with Hamster being down almost 10 million people from the start of the airdrop.
EigenLayer – The Next Succesful Airdrop
The EigenLayer airdrop recently made headlines as transfer restrictions on the native EIGEN token were officially lifted. This means holders can now freely trade, transfer, or stake their EIGEN tokens on various exchanges.
The lifting of these restrictions follows EigenLayer’s distribution of EIGEN tokens during two stakedrops, out of a total supply of 1.67 billion tokens. Around 200 million tokens are now in circulation.
This unlocking event is significant for the EigenLayer ecosystem. It opens up opportunities for developers to build AVSs using EIGEN staking, allowing stakers to secure these services and support a range of use cases. It also encourages partners to integrate EigenLayer's security into their protocols.
The unlock provides more flexibility, empowering both developers and the community to create decentralized services that leverage staked assets.
This move marks the start of a broader engagement and acts as a catalyst for economic growth, governance, and protocol development within the EigenLayer ecosystem, further strengthening the network's decentralized structure.
But, why do we think that this airdrop will be successful?
First of all, the EigenLayer team made no mistake during the airdrop. They didn’t make mistakes like Starknet or ZKSync, distributing the tokens without any problems or controversies.
Second, the token is backed by a protocol with a proven history and product. Let’s dive deeper into what EigenLayer is doing!
What is Restaking?
Restaking is a concept that lets users boost their earnings from staking while helping to secure smaller blockchain projects. It works by allowing staked assets to be reused, or "restaked," across multiple protocols.
EigenLayer lets users restake their ETH that’s already staked on Ethereum with Actively Validated Services (AVSs).
These AVSs are mainly blockchain protocols that support Ethereum scaling solutions. This means that instead of just earning rewards from the Ethereum network, users can earn additional rewards from other protocols too.
Restaking benefits smaller blockchain apps by providing them with enhanced security. These smaller projects often struggle to establish their own secure proof-of-stake systems due to limited capital and community size.
By sharing security from a larger pool, restaking makes it harder for attackers. For example, if 100 blockchain protocols each had $1 billion in separate stakes, it would be easier to attack any one protocol. But if they share $100 billion in restaked assets, it becomes much tougher.
EigenLayer Goes Beyond Restaking
While many think that the AVSs used by EigenLayer are only meant to facilitate ETH restaking, they have a much broader use case potential.
EigenLayer allows users to build almost anything, from consensus protocols to custom hardware and new staking tokens. The possibilities are endless, limited only by a developer’s imagination.
Here are some examples provided by the EigenLayer Foundation itself:
🔸Hyperscale Data Availability Layer: Provides high data availability rates at low costs. Enhances Ethereum’s decentralization by leveraging additional validator capabilities.
🔸Decentralized Sequencers: Assist rollups in managing miner extractable value and ensuring censorship resistance.
🔸Light-Node Bridges: Simplify connections between Ethereum and other networks, improving latency and efficiency.
🔸Fast-Mode Bridges for ZK Rollups: Allow off-chain proof verification by a quorum of operators, reducing costs and improving transaction confirmation times.
🔸Oracles: Create price feeds and other data services using majority trust on ETH restaked with EigenLayer.
🔸Low-Latency Settlement Chains: Enable fast economic finality, improving transaction speeds.
As of October 2024, there are over 18 AVS projects on mainnet, 40 on testnet and 100+ in development across different narratives like DePin, DeFi, Cryptography and more.
Top 3 Innovative EigenLayer dApps
Here are three of the most popular dApps built using EigenLayer:
EigenDA
EigenDA is a decentralized data availability service designed for rollups.
It offers high throughput and leverages Ethereum's security without requiring each rollup to set up its own validator set. This approach allows EigenDA to:
🔸Lower costs and complexity for securing data availability.
🔸Provide a secure and reliable service with high throughput, making it easier for rollups to operate efficiently.
Ritual
Ritual is the world's first sovereign AI network. It provides a low-code solution for dApps to integrate AI models seamlessly.
With EigenLayer, Ritual can create new AVSs to support various AI workstreams. This enables Ritual to:
🔸Ensure a high level of security and decentralization for AI operations.
🔸Open up new revenue streams for EigenLayer operators, making AI services more accessible.
AltLayer
AltLayer is a decentralized protocol that focuses on Rollups-as-a-Service.
It uses EigenLayer to build restaked rollups that enhance execution on the Ethereum network. AltLayer introduces three AVSs that provide:
🔸Decentralized sequencing and verification of rollup state correctness.
🔸Faster finality for existing rollups, improving their efficiency.
By using AltLayer, stakers can earn additional rewards through ALT Restaking, enhancing the overall security and interoperability of rollups.
Closing Thoughts
EigenLayer is here to change the way DeFi is shaped, making it more secure and user-friendly at the same time. The protocol has already facilitated the launch of several top dApps that reached over $3 billion in cumulative TVL, proving its technology as being worth the risk.
The
EIGEN airdrop is yet another step towards the expansion of the protocol, making the services it offers more accessible for token holders and investors alike. Due to its high utility and strong backing from its own protocol, EIGEN might be the best-performing token that was airdropped in 2024.
#EigenLayer #EigenDA #EigenLabs #EIGENonBinance
$EIGEN $STRK $ETH #restaking
