In recent months, the Ethereum staking landscape has witnessed significant transformations, triggering a shift in investor preferences and reshaping the dynamics of the sector.
According to on-chain data researcher and 21Shares strategist Tom Wan, key metrics indicate a notable shift in approach towards Ethereum staking, with re-staking gaining prominence as the preferred method.
Ethereum Reestablishment Landscape
Wan’s observations, shared On social media platform
Restaking can be accomplished in two main ways: via native restaking of ETH or using a liquid staking token (LST). By staking their ETH, users secure additional applications known as Actively Validated Services (AVS), which yield additional staking rewards.
A significant participant in the staking scene is EigenLayerwhich has emerged as the second largest decentralized finance (DeFi) protocol on the Ethereum network.
EigenLayer has reached a significant milestone with the launch of EigenDA, its actively validated data availability service (AVS), on mainnet.
According to a survey report by Kairos, this launch marks the beginning of a new era in reestablishment, where liquid reset tokens (LRTs) will become the dominant way for restokers to do business.
Currently, 73% of all deposits on EigenLayer are made via liquid reset tokens. The report highlights that the growth rate of LRT deposits has been significant, increasing more than 13,800% in less than four months, from approximately US$71.74 million on December 1, 2023, to US$10 billion on December 9. April 2024, demonstrating the growing confidence in EigenLayer. approach to reestablish and contribute to the changing tides in the Ethereum staking landscape.
According to Wan, the rise of liquidity re-establishment protocols has also contributed to a decline in the dominance of Lido (LDO), a staking company service solution for Solana (SOL), Ethereum and Terra (LUNC).
On the other hand, Etherfi has emerged as the second largest withdrawer of stETH, with 108,000 stETH withdrawn during the first quarter of 2024. This trend exemplifies the growing popularity of liquid re-settlement protocols, allowing stakers to withdraw and actively utilize their staked assets while still earning rewards.
Ether.fi Set to Outperform Binance in ETH Staking
Data provided by Wan also shows a decline in the dominance of centralized exchanges (CEXs) in ETH staking. Since 2024, CEXs have seen their staking share decrease from 29.7% to 25.8%, a significant drop of 3.7%.
As a result, decentralized staking provider Kiln Finance overtook Binance to become the third largest entity in terms of ETH staking. With Ether.fi set to follow suit, it is expected to overtake Binance’s position soon, according to the researcher.
In short, these developments signify a paradigm shift in the Ethereum staking landscape, with re-staking methodologies gaining traction and decentralized protocols like EigenLayer and Ether.fi challenging the dominance of established players.
At the time of this writing, the price of ETH is $3,500. It has been exhibiting a sideways trading pattern over the past 24 hours, remaining relatively stable compared to yesterday.
Featured image from Shutterstock, chart from TradingView.com
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