ATHs Incoming!

Staking Redefines DeFi, Kelp DAO Ascends, EigenLayer Dominates

GM, Anon! It's been quite a week, with ATHs seemingly within reach. However, the market appears to have cooled off a bit. Multiple indicators suggest that we might be overheating. The question now is whether we'll experience a significant pullback or surge to new ATHs before entering a period of market cooldown. Only time will tell. Let's delve into it!

In today’s email, we will be covering the following:

  • The Restaking revolution

  • Staking vs Restaking

  • The hottest Restaking airdrops

Liquid Staking Redfines DeFi

In comparing the current state of the market to that of 2021, a significant shift is evident: Dexs and lending platforms once accounted for most activity in DeFi, but liquid staking has emerged as the leading category, accounting for roughly $60B of a roughly $140B industry.

  • This transformation underscores a fundamental evolution in DeFi preferences and strategies among investors and users. 

  • Liquid staking's ascent to the forefront reflects a growing recognition of its benefits, such as enhanced liquidity and the ability to earn rewards while maintaining exposure to the underlying asset.

Liquid staking total market cap. Source: DefiLlama

Restaking Revolution

Furthermore, restaking is revolutionizing the DeFi landscape, with Eigenlayer spearheading the movement by allowing ETH stakers to simultaneously secure multiple blockchains. 

  • The TVL in restaking protocols has experienced a remarkable surge, skyrocketing from $1.1B to over $9.5B since the beginning of 2024.

  • Projects like EigenDA, AltLayer, and Lagrange are contributing to EigenLayer’s ecosystem, while other liquid restaking protocols, such as and Puffer, have also gained traction, accumulating close to $4B in TVL. 

  • Many have expressed concerns over the viability and security of staking long-term, but for the present time, it seems this will be one of the major sectors in the DeFi sector.

Restaking is expanding its share of the DeFi market.

Restaking isn't limited to Ethereum alone; other protocols are also adopting similar mechanisms for their ecosystems. Cosmos has witnessed the emergence of Persistence One (more on this in a bit), while Solana is making strides in this direction following the success of liquid staking protocols like Jito, Marginfi, and Marinade

MarginFi recently unveiled YBX, a yield-bearing stablecoin collateralized by liquid staking tokens such as jitoSOL, mSOL, bSOL, and LST. This stablecoin's yield is generated from the LSTs planned to launch within the next couple of weeks.

Kelp DAO Unlocking EigenLayer’s Potential

Kelp DAO is a leading liquid restaking protocol, that introduced Kelp Earned Points (KEP), representing EigenLayer points earned through restaking. 

  • This innovative move created on-chain opportunities for users to leverage EL Points directly. Previously, users could only utilize EL Points through WhalesMarket. 

  • With KEP, the process became seamless and equitable, unlocking new rewards for active restakers. 

  • The KEP claiming process operated on a weekly cycle initially, transitioning to fortnightly as the system matured. 

  • Be sure to read to the end of this letter for a strategy on how to get involved with Kelp DAO

Bitcoin Restaking

BounceBit, a novel Bitcoin restaking protocol, just successfully raised $6M in seed funding and has accumulated over $545M in TVL, signaling strong investor confidence and growing interest in this innovative approach being brought to Bitcoin. 

  • Co-led by Blockchain Capital and Breyer Capital, BounceBit's seed funding round attracted a diverse group of investors, including CMS Holdings, Bankless Ventures, NGC Ventures, and others.

  • Founded by Jack Lu, formerly a partner at NGC Ventures, BounceBit distinguishes itself by operating at the asset level rather than the protocol level, offering unique solutions in the Bitcoin restaking space.

  • BounceBit's proof-of-stake Layer 1 network supports assets like BTC, Binance's BTCB, and its native token, enhancing participation and chain security within the ecosystem.

  • With plans to launch BounceClub and the BounceBit App Store, the project aims to expand its ecosystem and provide users with a range of decentralized applications and tools tailored to their needs.

SynFutures V3 has made history as the first perpetuals DEX to debut on the Blast mainnet.

Exciting developments are underway as Blast mainnet has now officially launched and SynFutures introduces its points program, allowing users to amass SynFutures and Blast points, complemented by a developer airdrop allocation.

In a gesture to appreciate strategic investors, SynFutures extends a VIP referral code offering. With this exclusive code, referred users will enjoy a substantial 30% points boost during their inaugural week.

The benefits of this referral program include:

  • Referral link/code granting referred users a generous 30% bonus on their points accrued during the initial 7 days, without any cap on referrals.

  • 30% of the points earned by direct referrals and 15% from referrals of referred users will be allocated to the referrer.

  • Use this link.

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Staking vs Restaking 101 – Learn the Differences

What is Staking?

Staking is the practice of locking up tokens within the coin’s ecosystem. It is mainly done for one of these two reasons:

  • Staking is the foundational element of PoS blockchains, where validators lock up a certain amount of the blockchain's native tokens as a form of security deposit.

  • Users may also stake their tokens to add liquidity in various DeFi protocols and earn yield.

The primary appeal of staking lies in its ability to provide a passive income stream to token holders, who can delegate their tokens to validators and earn rewards in return.

What is Restaking?

Restaking, on the other hand, introduces a second layer of utility and potential rewards for staked assets. It allows the previously staked tokens to be used again in a different platform or program, essentially "restaking" them to leverage additional decentralized protocols. This process enhances the utility of staked assets and opens up new avenues for earning rewards. 

Despite its benefits, restaking is not without risks, primarily stake centralization and compounded slashing. 

  • Centralization occurs as validators offering higher APYs attract more delegations, leading to a concentration of network control. 

  • Compounded slashing introduces higher penalties for validators' misconduct due to additional conditions from restaking protocols, thus adding layers of risk to the restaking process.

Plus, restaking is not just limited to Ethereum. Persistence One has introduced restaking to the Cosmos Ecosystem. Persistence One has also published a blog to explain the differences between Ethereum and Cosmos restaking.

Plus, Crypto Pragmatist’s Jack Niewold also sat down with MIkhil Pandey from Persistence to discuss restaking in the Cosmos Ecosystem.

You can checkout the entire episode here.

Comparative Analysis: Staking vs Restaking

Restaking also opens up more avenues for airdrop opportunities – read on to learn more!

A Reminder to Farm Your Share in EigenLayer's 2024 Airdrop

EigenLayer, with its groundbreaking restaking technique and the backing of a $100M investment from Andreessen Horowitz's crypto arm a16z, is at the forefront of the blockchain innovation wave. This significant financial endorsement, further bolstered by Binance Labs' investment in Renzo, a platform within the EigenLayer ecosystem, underscores the protocol's potential to reshape the Ethereum blockchain's utility. By enabling Ethereum stakers to secure additional networks, EigenLayer is expanding the blockchain's capabilities and attracting a substantial asset pool, with nearly $8 billion already under its protocol.

For those looking to leverage this burgeoning ecosystem, participating in what is anticipated to be one of the most significant airdrops of 2024 could be a strategic move. The recommended approach involves engaging with Liquid Restaking Providers like ether.Fi, Swell, Kelp, or Renzo Protocol, which offer flexibility and liquidity, along with the potential for token rewards through confirmed airdrops.

Note: Ensure you have Ethereum ($ETH) in your wallet on the Ethereum mainnet (gas monies)

Four Protocols to Engage with EigenLayer for Airdrop Opportunities:👇📜

1. Restaking through providers like ether.Fi:

  • Visit the website, connect your wallet, and deposit a minimum of 0.01 $ETH to receive $eETH. Using referral links could offer additional airdrop benefits.

  • Maintain your $eETH in your wallet or within approved DeFi protocols to earn more points

  • Use our referral link to earn. Be a wise degen

Hint: Governance Token👇

Alternatively, you might want to consider running a node if you fulfil the necessary requirements.

2. Restaking through Swell:

  • Go to Swell's website, link your wallet, and convert your $ETH into $rswETH. Use our referral link and earn more (2x referral bonus for you and your referee for every rswETH minted)

  • Hold your $rswETH or engage with designated DeFi platforms to accumulate points for the airdrop.

3. Kelp DAO:

Kelp DAO is at the forefront of the liquid restaking movement in decentralized finance, having recently unveiled the Kelp Earned Points (KEP), a groundbreaking tokenized form of EigenLayer points. This innovation has captured the attention of the DeFi community, with 4.6 million KEP tokens already claimed. Kelp DAO's TVL stands impressively at $634.68 million, highlighting the protocol's significant traction. Additionally, the value associated with EigenLayer points has reached $156.54 million, underscoring the growing interest and speculative market surrounding these points within the DeFi ecosystem. By engaging with Kelp DAO's diverse functionalities, users can strategically position themselves to potentially benefit from the anticipated EigenLayer airdrop, further enhancing their participation in the evolving DeFi landscape

Airdrop Steps

  • Visit Kelp and connect your wallet to the platform.

  • Stake your ETH. After staking, you will be credited with rsETH, representing your staked Ethereum.

  • Restake on EigenLayer and begin accumulating EigenLayer points.

4. Renzo Protocol:

RenzoProtocol, a pioneering EigenLayer Restaking Protocol now live on the Arbitrum network, is set to transform the DeFi staking landscape. Chosen for its lower gas fees compared to Ethereum Mainnet, Arbitrum enhances DeFi efficiency and cost-effectiveness. Renzo enables smooth cross-chain ETH transfers from Arbitrum to the Mainnet, optimizing your blockchain investments.

Airdrop Steps

  • Visit Renzo: Navigate to the official Renzo platform by following Referral link

  • Connect Your Wallet: Upon arrival, connect your digital wallet to the platform. This step is crucial for integrating your assets with Renzo's services.

  • Restake Your ETH: Choose to restake your ETH within the Arbitrum network through Renzo. This process is streamlined to ensure ease of use.

  • Receive ezETH: In exchange for restaking, you'll be awarded ezETH. This new asset opens doors to a variety of DeFi platforms, including Silo, Radiant, Pendle, Camelot, and Dolomite, enriching your investment journey.

  • Earn Points: Beyond the immediate benefits, participating in Renzo's ecosystem allows you to accumulate EigenLayer Points & EzPoints, further enhancing the value of your engagement.

Take Action Now: In a landscape where resources are becoming increasingly scarce, it's essential to make every move count. By following these steps and leveraging Renzo's innovative platform, you position yourself at the forefront of the next wave of DeFi opportunities. Dive into Renzo's world today and transform your ETH staking experience on Arbitrum.

Important Considerations:

  • Retain your Liquid Restaking Tokens (LRTs) as they are crucial for accruing EigenLayer points, which are vital for the airdrop.

  • Keep an eye on Ethereum gas fees to optimize your investment by depositing when transaction costs are lower. Use a gas tracker to make life easier!

Conclusion: The EigenLayer protocol is revolutionizing blockchain with its cutting-edge restaking technology and robust financial support. By diving into the ecosystem and aligning with top liquid restaking providers, you stand at the brink of a transformative opportunity. Holding onto your LRTs could be your golden ticket to the much-anticipated 2024 airdrop. For those bold enough to commit a slice of their $ETH until at least Q2 2024, the potential payoff from EigenLayer's rapid expansion and the crypto world's unfolding story could be monumental. Don't miss out on this chance to be part of blockchain's next big leap.

Farm safely, stay degen!

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