Ethereum restaking protocols have witnessed a notable surge in Total Value Locked (TVL) due to strong demand for staking utilities.
Explosive Growth of Liquid Restaking TVL
DefiLlama data revealed that the value grew from hundreds of millions in January to tens of billions by December 2024. On January 1, the liquid restaking TVL on Ethereum was nearly $284 million, growing to $17.26 billion by December 15. This nearly 60-fold increase is credited to the utility of liquid restaking tokens (LRTs), which simplify traditional ETH staking complexities and boost capital efficiency in DeFi.
Liquid Restaking on Ethereum
Liquid restaking tokens enhance the utility of assets. In this process, users who have staked ETH can also stake the derivative tokens they received. This allows them to secure an application-specific blockchain or layer-2 network. While these assets offer flexibility, they come with risks such as the depegging of derivative tokens which may affect asset value negatively.
Ethereum Price Trends Amid Restaking Surge
As Ethereum’s liquid restaking TVL surged, ETH price rose from $2352.59 to over $4000 in early March, then dropped to $2,223 by September. However, amid broad bullish sentiments, the price surged again to the $4000 mark, currently standing at $3,894.95.
The growth in Ethereum's liquid restaking TVL in 2024 highlights the strong interest in staking opportunities despite associated risks.
