One of the biggest protocol growth this year has seen tremendous growth. This protocol is none other than Eigenlayer.
In just about 45 days, it grew to one of the biggest protocols around holding over $6.5 billion. Only reason the growth slowing down was that the protocol has 'paused' deposits at the moment.
So what is Eigenlayer and why has so much money been pouring into this one protocol itself?
Here's a quick run down:
What is Eigenlayer?
Eigenlayer is a protocol that is built on Ethereum that introduces 'Restaking'. This allows users to 'restake' their locked up tokens to validate the Ethereum blockchain, and allows reuse of these tokens to secure other protocols. This is known as Liquid Restaking Tokens (LRT)
Users are able to use their Liquid Staking Tokens (LST) like stETH (Lido staked Ethereum) or rETH (Rocketpool Ethereum) and deposit into Eigenlayer. These tokens have already been popular for users to stake ETH without the 32 ETH staking requirements.
Restaking rewards are then given to users who stake on Eigenlayer, on top of accruing rewards from their LST.
Backers of Eigenlayer
Eigenlayer raised $64.5m over 2 investing rounds and are being backed by big VCs like Coinbase and Blockchain Capital and Polychain Capital.
They are also valued approximately about $500M at the moment, and is set to grow even more.
This amount of funding is considered super huge considering many other big projects in the space just have fundings in the fractions of what Eigenlayer acquired.
Why Invest in Eigenlayer?
Biggest reason: Airdrop. Probably one of the biggest this year.
Stakers and restakers already got the first taste of it in the form of ALT.
Also, a high chance of future airdrops from other protocols plus also the main airdrop from Eigenlayer itself. ALT stakers gained anywhere from 4 to 5 figures just from restaking with Eigenlayer.
How to Restake?
One problem with Eigenlayer is that deposits are now closed as of writing this post. And when deposits open, it's usually in a very small window of time only.
And when that window of time is open to deposit, you only accrue Eigenlayer points to qualify for their airdrop
What if you could double dip to get more airdrops with Eigenlayer?
This comes in the form of LRT protocols that can help you accrue Eigenlayer points while gaining the protocol's points as well. Treat this as a double dip as you have a chance for Eigenlayer's airdrop plus the protocol you are staking with as well.
Introducing.. Ether.fi
Ether.fi is one of such protocol to help you restake in order to get both protocol and Eigenlayer rewards
One of the best thing is that the deposits are always open, and all you need to do is deposit ETH to get eETH.
It's a very simple process, and just a two step process!
Step 1: Sign in with your wallet
Go to: https://app.ether.fi/eeth?address=0x3AD0f3B10cea9640Ed42d207196713eF5CE1E9B2 (That's my link to get both of us extra points!)
Click the eETH tab on top.
Put the ETH you want to stake, then click Stake.
Done! (It's that simple)
Note: You need to account for gas fees. As this is all on Ethereum network, check the gas fee and make sure you have enough ETH for gas. It can be pricey at times!
Step 2: Deposit eETH into Pendle!
Now that you have eETH, it's time to make more yield out of your tokens.
You can deposit your tokens into Pendle and continue accruing points and rewards
Go to this pool: https://app.pendle.finance/trade/pools/0xf32e58f92e60f4b0a37a69b95d642a471365eae8/zap/in?chain=ethereum
Choose 'Zap' option (should be default), then deposit eETH into the vault.
Done! You now are earning for Eigenlayer, Ether.fi and Pendle rewards!
Considerations for Farming Eigenlayer Airdrop
Gas fees: With this being on Ethereum, every step from approval to depositing will costs a considerable amount of gas fees (Expect $10 to $100 in total). You can check Etherscan for when gas fees are lower to reduce your fees (Try waiting for around 10 to 25 gwei)
Your tokens are locked: Treat this as your liquidity being locked, especially that you need your tokens there to continue accruing points. There is also no way to redeem eETH tokens at the moment.
High Risk Venture: There is always a chance that there is no airdrop, and that the protocol may go under. There's no 'too big to fail', as seen before with LUNA with Anchor protocol which was 3rd in TVL at one point of time before the collapse. If you are depositing into Eigenlayer, you need to accept that you can lose all your funds.
Conclusion
Hope that this short guide gives you a quick overview of what's up in the market and how to take advantage of possibly one of the biggest airdrop in history.
I personally invested quite a huge sum of money into this, and channeling even more money as I can see the big potential in this one. Plus, investing in Ethereum has a very good risk to reward ratio in my opinion.
If you want to support me, definitely use my link for Etherfi as it'll give me more points (and give you sign up bonus as well).
Also, you can subscribe to my newsletter here as well as I'm trying to grow on this platform too!
