TVL surges to $1 billion following lifting of staking constraints.
The EigenLayer protocol has surpassed $1 billion in total locked value (TVL) after lifting staking restrictions to generate more “organic demand” on the network. EigenLayer has decided to increase the staking limit to 200,000 Ethereum (ETH) by February 9th, with the aim of creating organic demand. This temporary removal of restrictions sets the stage for a future where all betting restrictions will be permanently eliminated.
Following this announcement, the TVL of the protocol, according to DefiLlama, has risen from around $2.5 billion to nearly $3.65 billion, as investors poured their liquid ETH tokens into the protocol. This significant increase represents a staggering $1.15 billion surge in just one week.
EigenLayer serves as an infrastructure component that enhances the adoption of ETH staking, transforming it into a public good that other networks and protocols can utilize without starting from scratch for security purposes. It presents a novel use case for ETH staking. However, developers have expressed concerns about the protocol’s mechanics, noting that a large volume of re-staking resembles leverage.
Notably, Ethereum co-founder Vitalik Buterin previously cautioned about the potential risks associated with increased re-staking and excessive reliance on data or price oracles, stating that they could pose systemic risks to the Ethereum ecosystem.
In related news, Vitalik Buterin has unveiled a major overhaul of Ethereum staking to enhance decentralization. Follow us on Google News for more updates.
