Ethereum restaking has the potential to be the next big cryptocurrency narrative in 2024

3cMk...kvYV

15 Jan 2024

Following the spot Bitcoin ETF which is ready to be traded after successfully receiving official approval, the entire crypto industry can now finally breathe a sigh of relief. Now, investors' attention is starting to shift to the next big narrative, namely Ethereum restaking.

Crypto market analytics platform CoinGecko has just launched a new category for restaking tokens, which according to analysts, has the potential to be a significant growth area this year.

Ethereum Restaking Narrative

In essence, restaking allows users to carry out the same ETH stake, both on Ethereum and other protocols. This functions to maintain the security of all these networks simultaneously and utilize the existing trust network.

By leveraging Ethereum validators and staked tokens, smaller and newer blockchains can benefit from Ethereum's reliable security and trust systems. And in turn, this will significantly reduce the risk of attack or failure for them.

On January 10, one DeFi researcher, Ignas, stated, “I believe this will be the fastest growing category in 2024.”

Based on this new category from CoinGecko, the market capitalization for restaking is currently at US$300 million. Although there are currently only a few restaking platform tokens listed, a significant price spike has been recorded over the last 24 hours.

In the restaking sector, Pendle Finance leads with the largest market capitalization, namely US$164 million. And at the time of publication, their native PENDLE token had seen its price spike by 20% to US$1.73, just 30% below its May 2021 peak.

Furthermore, Picasso (PICA) became the second largest restaking token by market capitalization, and its value jumped 20% at the time of publication. The PICA price is currently sitting at US$0.024, down from its record high price (ATH) last week.

Meanwhile, Restake Finance (RSTK) has skyrocketed by 42% and managed to set a record ATH of US$2.64 on January 10.

Lastly, EigenLayer is one of the largest restaking middleware platforms, launching to mainnet in June 2023. This venture capital-backed platform does not have its own native token. However, EigenLayer provides the capability to carry out staking on other liquid staking tokens. Currently, EigenLayer's total value locked (TVL) is US$1.7 billion.

ETH Price Surge

The basic asset for all of these restaking initiatives is Ethereum, and their native asset, namely ETH, recorded a price spike yesterday (11/1).

ETH prices have soared by 9.4% to over US$2,600 for the first time in almost two years. After months of unsatisfactory performance, this asset finally managed to outperform its older brother.

Furthermore, this huge surge has also pushed Ethereum's market capitalization back to above US$300 million, giving it a 17% share of the total crypto market.

Articles list :