The Eigen Foundation has announced that it will allocate 1% of the EIGEN token supply to the Protocol Guild, a group of core developers responsible for maintaining the Ethereum layer-1 blockchain. This move aims to support the continued work of the Protocol Guild, which currently consists of 180 members from 29 teams.
What is EigenLayer?
EigenLayer is a staking protocol on Ethereum that allows Staked Ether (stETH) and other assets to be repurposed and staked multiple times. This innovation gives investors additional yield opportunities while enabling other protocols to leverage Ethereum’s security. As a result, EigenLayer has positioned itself as a critical component of the Ethereum network’s infrastructure.
EigenLayer’s Impact on the Ethereum Community
The role of EigenLayer in the Ethereum ecosystem has drawn both praise and concern from the community. On one hand, EigenLayer has been praised for its innovative approach to staking and its potential to increase adoption and utilization of the Ethereum network. On the other hand, some have expressed concerns about the security implications of allowing multiple staking opportunities.
The Rise of Restaking
Restaking has been touted as a way to bring fresh capital injections into crypto and has the potential to create a new asset class as restaking becomes an outsourced form of security for blockchain protocols and decentralized applications (DApps). By allowing protocols to use restaked assets for network security, EigenLayer has alleviated the burden of launching a token to secure the network. This can significantly lower the barrier to entry for developers and DApps.
Current State of Restaking
According to DefiLlama, restaking protocols currently have about $26.9 billion in total value locked (TVL). EigenLayer comprises the majority of this TVL at about $18.2 billion. This indicates that EigenLayer is a leading player in the restaking space and has attracted significant attention from investors.
EIGEN Token Performance
The popularity of EigenLayer helped the EIGEN token crack the top 100 cryptocurrencies by market capitalization in October. However, it has since fallen out of the top 100 and is currently ranked 108 by market cap. Despite this, the EIGEN token remains a significant player in the cryptocurrency market.
Recent Developments
In November, EigenLayer expanded its restaking options to include Wrapped Bitcoin products. The update allowed users to deposit uniBTC to the ARPA Network, which is a protocol built on EigenLayer, in return for a yield. This move aims to increase adoption and utilization of the EIGEN token.
Total Value Locked in DeFi
December data from DefiLlama showed that the total value locked across the decentralized finance ecosystem was nearing 2021 highs. This surge in total value locked was partially attributed to liquid restaking products and the proliferation of wrapped Bitcoin instruments.
Conclusion
The Eigen Foundation’s allocation of 1% of the EIGEN token supply to the Protocol Guild is a significant move that aims to support the continued work of the core developers responsible for maintaining the Ethereum layer-1 blockchain. As the restaking space continues to grow, it will be interesting to see how EigenLayer and other protocols navigate the regulatory landscape and address security concerns.
FAQs
- Q: What is EigenLayer?
A: EigenLayer is a staking protocol on Ethereum that allows Staked Ether (stETH) and other assets to be repurposed and staked multiple times. - Q: How does restaking work?
A: Restaking allows protocols to use restaked assets for network security, alleviating the burden of launching a token to secure the network. - Q: What is the total value locked in restaking protocols?
A: According to DefiLlama, restaking protocols currently have about $26.9 billion in total value locked (TVL). - Q: How has the EIGEN token performed recently?
A: The EIGEN token cracked the top 100 cryptocurrencies by market capitalization in October but has since fallen out of the top 100 and is currently ranked 108 by market cap.
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