EigenLayer, a decentralized finance (DeFi) platform, has seen a major surge in total value locked (TVL) after increasing its liquid restaking cap to 100,000 Ether (ETH). According to DefiLlama, the restaking protocol, which went live in June, hit the 100,000 cap in a matter of hours, causing TVL to jump from $78 million to $238 million. TVL is the number of tokens locked on any crypto platform.
The protocol allows users to restake ETH by depositing liquid staking tokens (LSTs) such as lido stETH (stETH), rocket pool ETH (rETH) and Coinbase-wrapped staked ETH (cbETH). Restaking is a method of obtaining additional rewards on ETH that are staked on the main Ethereum blockchain. To become a network validator – an entity that supplies computing resources to a blockchain for processing transactions – users must stake 32 ETH.
EigenLayer gradually increases its liquid staking token cap before initiating a global pause in order to enable a more extensive network of users to actively participate in restaking endeavors, as per technical documents. All future LST cap increases will be determined by a governance process that needs to be approved by EigenLayer’s multisignatory governance system. EigenLabs, the developer of EigenLayer, raised a total of $64.5 million earlier this year, including $50 million in a Series A round led by Blockchain Capital.