The retaking market, a process for generating interest on already staked cryptocurrencies, has been experiencing a slowdown in recent weeks. This trend is reflected in a decrease in the total value locked (TVL) across the ecosystem, particularly observed on the EigenLayer and Renzo protocols.
EigenLayer records $4.6 billion in outflows over 1 month
Retaking, a method of locking up already staked cryptocurrencies to earn additional rewards, is going through a rough patch.
In fact, in recent weeks, we observe a decrease in the total value locked (TVL) across the ecosystemwith striking examples like those of EigenLayer and Renzo.
👉 Learn more about EigenLayer – What is EigenLayer? Learn all about the retaking protocol for Ethereum
On July 11, The EigenLayer protocol experienced its largest outflow day since its inception, withdrawing 43,550 ETH, or approximately $135 million at that time.
During this week, Net outflows exceeded $68 millioneven taking into account the inflow recorded on certain days.
These outflows, which have become increasingly common in recent weeks, caused EigenLayer's TVL to drop by approximately 27% from its historic peak in early June ($20.1 billion TVL).
EigenLayer's TVL is around $15.5 billion at the time of writing, which means that The protocol lost $4.6 billion in TVL in just over a month.
Swell: the liquid retaking protocol for ETH
Retaking: a drop that also affects Renzo and the rest of the sector
The downward trend seen in EigenLayer's TVL is also present in other restaking protocols.
Indeed, Competitor Renzo lost almost half of its TVL in just one monthdropping from $4.07 billion in early June to $2.02 billion today. Other restaking protocols, such as Puffer, KelpDao, Swell, and Eigenpie, have lost an average of 22% of their TVL over the same period.
The main reason for this decline is probably the end of the airdrop campaigns of the 2 biggest restaking protocols: EigenLayer with its EIGEN token and Renzo with the REZ.
The end of these campaigns has probably discouraged the “farmers”, those users who regularly use the protocols to take advantage of airdrops and their rewards in the form of tokens.
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On the other hand, retaking protocols that have not announced a token launch or still have airdrop campaigns underway, like Swell, have also seen a drop in their TVLThis trend could indicate that investors no longer find Swell attractive enough for its future airdrop.
Unlike its other competitors, the Symbiotic protocol has seen its TVL explode since the beginning of the month, going from $311 million on July 1 to $1.24 billion on July 19.
The restaking sector could also be perceived as saturatedwhich would contribute to the current drop in TVL on a large part of the protocols. Faced with the multiplication of the latter and the increasing competition, investors could become more selective in their investments within decentralized finance (DeFi).
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Source: Defillama
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