The long-troubled Ethereum ecosystem is finally about to usher in a new narrative, in addition to benefiting many L2's DenCun upgrade. The restaking tide following EigenLayer's opening of increased LST mortgage quotas at the end of last year has become a focus of the Ethereum ecosystem. EigenLayer has attracted over 500K ETH TVL in just one month, breaking through US$1 billion and now reaching US$1.4 billion, currently ranking 12th in Ethereum Defi TVL. As the first AVS using EigenLayer verification services, EigenDA is about to launch, and DA narrative has also become a market focus following the surge of Celestia's token $TIA, in addition to enhancing itself, EigenLayer has also brought a new track - Liquid Restaking Defi (LRD)/Liquid Restaking Token (LRT). As the name implies, LRD projects aim to release the liquidity of LST (stETH, swETH, ETHx) in EigenLayer by issuing mortgage credential tokens (LRT) to help users unlock liquidity and form a new round of token wrappers.

Today Dr. DODO will introduce which projects are worth participating in under the liquid restaking services. This article will focus on 4 projects that have launched products but have not yet issued tokens.

What is Restaking?

Half a year ago, Dr.DODO introduced to everyone the concept of EigenLayer and its Restaking. Simply put, it is an additional layer of returns on top of your staked ETH in POS.

After understanding EigenLayer, let me explain the derivative projects under the Restaking narrative. Referring to the diagram from Delphi Digital, you can easily understand the four types of Restaking:

• LSD Restaking: Deposit the LST (stETH, swETH, etc.) obtained after depositing into the LSD protocol into EigenLayer for restaking

• Liquid-LSD Restaking: Through LRD protocols such as KelpDAO, etc., delegate LST to LRD protocols to deposit into EigenLayer for restaking on your behalf, while users get the mortgage credential token Liquid Restaking Token (LRT)

• Native Restaking: Native restaking refers to stakers who operate native nodes can also provide ETH to EigenLayer for restaking

• Liquid Native Restaking: Liquid Native Restaking refers to projects that provide small ETH node services like etherf.fi or Puffer Finance, deposit ETH inside nodes into EigenLayer for restaking

KelpDAO

KelpDAO is an ecological restaking project made by LSD project Stader Lab. As mentioned above, it is a Liquid-LSD Restaking type. It currently supports Lido's stETH and Stader's ETHx, but due to EigenLayer's LST quota being full, deposits are currently suspended. In addition, the team also made it clear that users who deposit into KeplDAO will be eligible for EigenLayer scoring rewards. The current protocol TVL exceeds 160M and is the LRT field with the highest TVL.

Renzo

Renzo, unlike KelpDAO, is a Liquid Native Restaking type product, which means it is not subject to EigenLayer's LST deposit limit and can still deposit ETH now. However, it should be noted that ETH deposited in Renzo currently does not allow redemption, and the mortgage credential ezETH also cannot be transferred in the short term. Like KelpDAO, the team also said users will be eligible for EigenLayer scoring. Currently, the team background and financing information have not been disclosed. Early projects need to be aware of risks.

Swell

The Swell Network is also a veteran LSD protocol. It also officially stated that it would step into the Liquid Restaking field. It is also a Liquid Native Restaking type of product that will not be subject to EigenLayer LST quota restrictions. Due to Swell not having a token issuance, it has an airdrop expectation, so its LST token swETH has gained the favor of many airdrop hunters and is currently the second largest staked asset in EigenLayer.

At present, only the LSD product section allows partial staking to obtain the swETH token, while the Liquid Native Restaking product that stakes ETH to obtain rswETH has not yet opened.

ether.fi

ether.fi, like the two previous projects, is also a Liquid Native Restaking type of product. It has received US$5.3 million in seed round financing from BitMEX founder Arthur Hayes. Unlike LIDO, ether.fi adopts a decentralized, non-custodial approach to implement ETH staking, and also announced to provide restaking services. Since it is native ETH restaking, it is also not limited by EigenLayer LST quota and can still deposit. Its mortgage credential token eETH (wrapped token weETH) is also currently one of the few LRT mortgage credential tokens with liquidity.

Author's Perspective

I believe that after the spot bitcoin ETF officially lands in 2024 Q1, the Ethereum ecosystem will hopefully see a rebound. The three major narratives will be the main melody of the Ethereum ecosystem. The first is the Ethereum layer 2 ecosystem directly benefited by the Cancun upgrade; the second is EigenLayer restaking ecology introduced today; and the third is Web3 application projects (games, payments, etc.) aimed at mass adoption. The Liquid Restaking projects introduced today are the most cost-effective way to participate in the EigenLayer restaking track, requiring only a deposit of ETH into the relevant protocols to participate in the feast.

In addition to the four projects introduced above, there are currently many more brewing and raring to go, such as Puffer Finance, which Dr. DODO previously introduced, recently announced that it will participate in restaking. But due to its product not yet being online, it will not be elaborated in this article. But everyone can also keep an eye on other projects in this field at any time and participate moderately under controllable risks. Maybe waiting for the relevant protocols to issue tokens will allow profits.