EigenLayer is an Ethereum protocol that introduced restaking, a new primitive in crypto-economic security. This primitive enables the rehypothecation of $ETH on the consensus layer, allowing users that stake $ETH to opt-in to EigenLayer smart contracts to restake their $ETH and extend crypto-economic security to additional applications on the network. EigenLayer's restaking mechanism aggregates and extends crypto-economic security, allowing stakers to validate new applications being built on top of Ethereum. EigenLayer's innovative approach integrates key management technology to handle withdrawal and validation keys separately in the staking process, which sets it apart from traditional staking protocols. EigenLayer aims to contribute to the decentralization of the Ethereum network by enabling both permissionless and permissioned paths for running a node. EigenLayer has gained significant TVL and support from institutional capital over the past months. Liquid Restaking Tokens (LRTs) are the liquid representation of restaking positions.

Market landscape

The total amount of ETH being restaked has grown significantly over the past months. Current data indicates that 1,140,162 ETH (source: https://dune.com/hashed_official/lrt) has been restaked in multiple LRT protocols, propelling this into the top 10 of highest TVL DeFi categories according to data from DefiLlama, with a current TVL of $3.33 Billion:

Let’s take a closer look at four major Liquid Restaking Token protocols that are gaining momentum:

EtherFi (eETH)

EtherFi was the first LRT on the market that enabled stakers to unlock the benefits of ETH staking, staking rewards and EtherFi/Eigenlayer points. It currently holds the lead position in TVL rankings, capturing ~35% of the Liquid Restaking Market, with roughly 413,000 ETH restaked.

Kelp DAO (rsETH)

Restakers in Kelp can stake their Liquid Staking Tokens (LSTs) to generate rsETH tokens, which represent the related ownership of a pool of the underlying restaked assets. These tokens are then allocated among different Node Operators collaborating with the Kelp DAO. The value of the rsETH token reflects the underlying value of the various reward and staked tokens. In simple terms, by staking their LST, users can earn rsETH tokens, which entitle them to a share of rewards from the restaked assets, reflecting the overall value of the staked and reward token.

Renzo (ezETH)

Renzo is a Liquid Restaking Token (LRT) and Strategy Manager for EigenLayer. It serves as the gateway to the EigenLayer system, which secures Actively Validated Services (AVSs) and provides a higher yield compared to ETH staking. Currently it holds a market share of ~9.5% of the total Restaking Token TVL.

Swell (rswETH)

rswETH is Swell’s ERC20 Liquid Restaking Token that provides liquidity for users who want to "restake" their ETH into restaking protocols such as EigenLayer without requiring a 32 ETH minimum, operating a node or having their restaked ETH locked.

What’s next?

By tapping into the ~$3 Billion Liquid Restaking Market, Prisma Finance will lay the groundwork for one of the first DeFi applications for LRT holders, providing access to the first stablecoin backed only by LRTs. Given the different risk profile associated with LRTs compared to LSTs, PrismaLRT provides the flexibility to finetune its parameters independently. PrismaLRT will introduce a new stablecoin $ULTRA backed by LRT. This product will be tailored to LRT holders seeking more yield while staying exposed to the point system in play with restaking. Prisma has already reviewed several LRT collaterals, assessing the corresponding risk levels and determining the appropriate parameters for each, in close collaboration with the respective teams. We are pleased to work in close relationship with them, and with RedStone Oracles, allowing for swift integration in the next weeks and more incentive for LRTs users on PrismaLRT.

Join the Prisma Community

To get involved and stay up to date:

• Visit the website: Prismafinance.com

• Read through the documentation

• Meet the community on Discord

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