As a seasoned analyst with years of experience in the cryptocurrency market, I have witnessed numerous projects come and go, but EigenLayer stands out as one that has consistently shown promise and adaptability. Launched just a few years ago, this protocol has managed to secure an impressive number of actively validated services (AVSs) with nearly $19 billion of restaked collateral, according to DefiLlama. This is no small feat in the rapidly evolving world of DeFi.
In simpler terms, as stated in a blog post dated December 6th, the largest re-staking protocol on Ethereum, EigenLayer, is enhancing its reward system to provide more adaptability for both protocols and re-stakers.
Through changes, external protocols can employ EigenLayer, which are referred to as Actively Validated Services (AVSs), to dispense rewards to validators contingent on their performance. Moreover, these validators, often referred to as “operators,” have the autonomy to determine their own fee rates, according to EigenLayer.
According to a recent post on the X platform, the updates aim to enhance flexibility, boost efficiency, and provide more personalized options for rewards within the EigenLayer system, offering a more customizable experience.
EigenLayer said the upgrades will launch on the mainnet in January.
Largest restaking protocol
2023 saw the debut of EigenLayer, which has successfully onboarded around 40 AVSs (Application-Specific Verification Systems) backed by approximately $19 billion in restaked collateral, as per DefiLlama’s data.
Restaking refers to the process of reusing a previously staked token, which was pledged as collateral with a validator to earn rewards, by employing it to support multiple protocols concurrently.
Some 20 AVSs are already live on EigenLayer’s mainnet, and dozens more are in development.
Option: They encompass EigenDA, a network developed by EigenLayer creator Eigen Labs, as well as ARPA Network, which is renowned for its expertise in trustless randomization.
Starting October 1st, the EigenLayer platform introduced its own token, named EIGEN. Unlike other proof-of-stake tokens such as Ethereum (ETH), this token is designed to safeguard protocols against a more extensive range of errors and faults that current proof-of-stake tokens cannot handle, as stated by EigenLayer.
Currently, on December 6th, the trading price for EIGEN is approximately $4.92. This equates to a total market capitalization of almost $8.25 billion when considering all potentially diluted shares, as per CoinMarketCap’s calculations.
Rewards program
On Sept. 17, EigenLayer launched a programmatic incentives program to woo restakers.
As an analyst, I can express this point in a more conversational manner like this: When it comes to our program, those who stake their tokens will be handsomely rewarded with EIGEN tokens that make up around 4% of the overall token supply.
According to EigenLayer’s founder, Sreeram Kannan (who spoke with CryptoMoon in October), Stakers will receive rewards automatically based on the number of AVSs they support, and in return, AVSs will pay fees to both stakers and operators.
“The more AVSs pay, the more value gets allocated,” said Kannan.
As a researcher, over the past few months, I’ve been witnessing the distribution of approximately 14,000 ARPA tokens weekly by the ARPA Network, which is a key component of EigenLayer’s reward system. Each week, these tokens are being allocated to restakers, contributing to their earnings.
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2024-12-06 23:57