The EigenLayer Mainnet: What's Been Achieved and What's Next?

September 17, 2024

In June 2023, EigenLayer launched its mainnet, setting the stage for a new era in decentralized finance (DeFi). By introducing the concept of Security-as-a-Service (SaaS) through restaking, EigenLayer aimed to redefine how blockchain security could be managed and monetized.

As we approach the end of the year, a historically bullish phase for crypto overall, it’s time to look back at EigenLayer’s protocol journey post-mainnet, explore its key developments, and understand how InceptionLRT has positioned itself as a vital component of the rapidly evolving space of Restaking.

What is EigenLayer?

EigenLayer is a Defi protocol that pioneered the concept of restaking, allowing users to repurpose their native Ethereum (ETH) or staked ETH through liquid staking tokens (LSTs) to secure different decentralized applications (dApps) and services. This approach makes use of Ethereum's current staking infrastructure to provide increased security across several networks while also generating additional rewards for restakers.

The protocol is addressing the rising need for scalable security solutions in the decentralized finance (DeFi) ecosystem by allowing for the flexible use of staked assets, facilitating more efficient capital allocation and promoting the development of new financial products and services in Defi. EigenLayer has rapidly gained popularity since its mainnet launch in June 2023, garnering considerable capital and integrating with various key DeFi protocols including InceptionLRT.

The Genesis of EigenLayer

Mainnet Launch Recap

EigenLayer’s protocol mainnet launch in June 2023 marked a significant milestone in the blockchain industry. The initial reaction from the crypto community to the launch was mixed, with a combination of excitement and criticism.

The protocol quickly attracted significant capital, reportedly becoming the second-largest DeFi protocol with a total value locked of $15.7 billion shortly after launch. The restaking model was praised for its potential to build new layers of decentralized applications on top of Ethereum, leveraging its existing staked capital.

Eigenlayer Architecture & Stakeholders (Source)

However, the launch also faced criticism, particularly around the airdrop of the $EIGEN token. Some concerns centered on the initial non-transferability of tokens, a measure the Eigen Foundation implemented to ensure critical critical feature were fully established before enabling trades. The linear distribution modelused for the airdrop, which was used to preventing Sybil attacks, was also debated for potentially favoring larger stakers.

Overall, while some aspects of the airdrop received critique, the Foundation’s decisions were primarily at ensuring the long-term success and integrity of the Eigenlayer network, fostering a secure environment for all participants.

Market Context

Regardless of the sentiment at the time, the launch successfully addressed a crucial need in the DeFi space: boosting Ethereum’s security while promoting composability and new yield opportunities. By leveraging existing staked capital to secure multiple dApps, EigenLayer’s restaking model provided a much-needed value proposition.

At the heart of this vision were three key participants: restakers, node operators, and Actively Validated Services (AVSs). We will be taking a brief look at AVSs below, but if you wish to learn more about AVSs and their impact check out our recent article: Actively Validated Services (AVSs): Unleashing the Power of Restaking on EigenLayer

EigenLayer Mainnet Achievements

Since its mainnet launch, EigenLayer has achieved several milestones that underscore its rapid growth and adoption:

Early Adoption and TVL Growth: The protocol saw rapid adoption in its first few months, with Total Value Locked (TVL) increasing to roughly $280 million in the first three months. This growth highlighted the market’s confidence in EigenLayer’s restaking model and its potential to redefine DeFi security. Nowadays, the protocol’s TVL sits at a whopping $10,8 billion and with a total 4.5 million ETH restaked.

EigenLayer’s TVL Growth since it’s mainnet Launch (Source)

Stakedrop Events: EigenLayer introduced its first "Stakedrop" event to distribute EIGEN tokens to early adopters and participants in restaking. This event, known as Season 1, significantly boosted user engagement and protocol adoption. The second season of the Stakedrop event is currently underway, potentially further increasing EingenLayer’s reach.
Major Protocol Integrations: A number of significant protocols have integrated with EigenLayer to leverage its restaking model, including Etherfi, Puffer Finance, InceptionLRT, and countless others.
Growth of Actively Validated Services (AVSs): The number of AVSs using EigenLayer has steadily increased, showcasing the growing demand for its security-as-a-service model. Nowadays we have professionals, known as AVS curators, who specialize in selecting and managing the most lucrative and secure AVSs.

A key development in this area was the launch of EigenDA, a decentralized data availability layer built on EigenLayer. EigenDA offers significantly higher data bandwidth at lower costs compared to the Ethereum base layer. This has attracted several new AVSs to the ecosystem, further solidifying EigenLayer's role as a foundational protocol for decentralized finance and beyond.

For more insight on EigenDAs AVS solution and how it’s leading the ecosystem, check out our blog about it: Elevating Ethereum with EigenDA: A Mainnet Milestone

Growth of Liquid Restaking Solutions Built on EigenLayer

Liquid Restaking Explained

Liquid restaking emerged as a powerful extension of EigenLayer’s core infrastructure. It enables restakers to maintain liquidity while participating in additional yield opportunities. Liquid Restaking Tokens (LRTs) play a crucial role in this space by providing a means for restakers to earn additional yields without locking up their assets entirely.

Emergence of Liquid Restaking Protocols

Several key liquid restaking protocols have been built on EigenLayer, including InceptionLRT, EigenPie, and others. These protocols offer innovative ways for users to maximize their staking rewards while maintaining flexibility and liquidity. Here’s how the Liquid Restaking scene has been growing since the beginning of the year:

Liquid Restaking Protocol Growth in TVL in 2024 (Source)

InceptionLRT’s Role in the EigenLayer Ecosystem

Contributions to Ecosystem Growth

InceptionLRT has played a vital role in expanding the EigenLayer ecosystem through unique features such as Flash Unstake and isolated liquid restaking. We are also one of the few protocols to offer both native and isolated liquid restaking. These offerings have helped increase user growth and facilitated successful DeFi integrations.

Strategic Developments and Future Plans

Looking forward, InceptionLRT plans to expand to BTCfi’s emergent market, integrating BTC restaking services. We speculate that EigenLayer may soon accept BTC derivatives as restakable assets. This strategic development could open new avenues for growth and attract a broader range of stakers, establishing InceptionLRT as the go-to restaking solution.

Future Outlook: What’s Next for EigenLayer and InceptionLRT?

Upcoming Developments for EigenLayer

BTC Derivatives Integration: While not yet confirmed, there is speculation about the integration of BTC derivatives as restakable assets. This move could significantly enhance EigenLayer’s value proposition and attract a new class of users.
StakeDrop Season 2: The eagerly anticipated second season of the Stakedrop event is set to go live today (September 17th), potentially driving a new wave of user participation and TVL growth.

Growth Opportunities for InceptionLRT

The future of restaking in DeFi looks promising. According to recent predictions by The Milk Road, DeFi could hit a $700 billion market cap by the end of 2025, with restaking playing a significant role in this growth trajectory.

By focusing on these key developments and strategic plans, EigenLayer and InceptionLRT are well-positioned to drive innovation and growth in the space. We expect to take a larger pie of this expanding market and expand InceptionLRT into new territories beyond EigenLayer.

Let’s leverage our expertise and established network to create products DeFi users can be proud of! Join InceptionLRT today and help shape the future of decentralized finance through Restaking