EigenLayer, an ethereum-based recovery protocol, has surpassed Uniswap, the leading decentralized exchange (DEX) on the ethereum network, in terms of total value locked (TVL).
Data from DeFillama shows that EigenLayer has become the top-performing decentralized finance (DeFi) protocol over the past month. Its TVL skyrocketed 171% in the last seven days alone, reaching $5.67 billion, positioning it as the fifth largest DeFi protocol.
In contrast, Uniswap saw a modest 6% increase in TVL, reaching $4.31 billion over the same period. Other prominent DeFi protocols, such as Lido, Aave, and Maker, also experienced comparatively modest growth rates of less than 10%.
Meanwhile, EigenLayer's rapid rise follows the growth of staked eth to an all-time high of over 29 million tokens despite the recent liquidation by defunct cryptocurrency lender Celsius, according to Nansen data shared with cryptoslate.
Why is EigenLayer TVL increasing?
EigenLayer's rise can be attributed to the reopening of its deposit vault on February 5.
Since then, eth holdings on the platform have skyrocketed from 941,000 to 2.3 million in one week, a significant increase. This influx represents approximately 2% of the total circulating supply of ethereum now staked through this platform.
Blockchain analysis company SpotOnChain reported that EigenLayer's top four stakers are Puffer Finance, Tron network founder Justin Sun, Eigenpie, and Kelp DAO. Puffer Finance leads the pack with 233,600 eth re-staked, followed by Sun with around 109,300 eth; Eigenpie and Kelp DAO follow closely behind, having re-staked 88,600 eth and 75,300 eth, respectively.
What is the proper layer?
EigenLayer dominates the recovery market and attracts significant attention from the crypto community. Since June 2023, this DeFi protocol has gradually increased its deposit limit through a phased launch strategy.
The eth recovery has become one of the leading narratives in the cryptocurrency market as it allows investors to earn additional rewards for their staked eth. The protocol supports popular liquid staking tokens, such as lido staked eth (stETH) and rocket staked eth (RETH), through its platform.
Murathan, a contributor to the DeFi collective, noted the growing popularity of native recovery among eth validators. He saying:
“1 in 4 validators entering the ethereum validator queue set up their withdrawal credentials on an EigenPod.”
However, some community members have warned that the model could create a Ponzi scheme that could soon collapse.
