Ethereum, ranking as the second-largest cryptocurrency by market value, is approaching the critical $4000 mark for the first time since December 2021, witnessing a 15% increase over the last week.
During this surge in price, the prominent restaking protocol EigenLayer has ascended to become the second-largest DeFi protocol by total value locked, as reported by DeFillama.
Ethereum’s price has reached $3954 after a 4% increase over the past 24 hours, as per the data from CryptoSlate.
ETH’s price
This rise in Ethereum’s price is attributed to the anticipation of the forthcoming Dencun upgrade, set to be implemented on the mainnet by March 13. Dencun introduces proto-danksharding to Ethereum, which is a deliberate effort to reduce transaction costs for layer-2 blockchains, directly addressing scalability issues.
Additionally, the market is eagerly awaiting the potential endorsement of a spot ETH ETF by the US Securities and Exchange Commission. If granted, this approval could significantly amplify the current upward trend in price.
EigenLayer’s soaring TVL
EigenLayer’s total value locked (TVL) reached a record high of $11.7 billion over the week, overtaking Aave’s TVL of $11.4 billion.
Significantly, on March 5, the protocol experienced a remarkable increase in TVL by $790 million, its largest daily growth since February 9, as reported by the blockchain analytics company IntoTheBlock.
EigenLayer’s total value locked (TVL) has seen an extraordinary expansion, particularly over the last 30 days, with a five-fold increase from around $2 billion at the beginning of the previous month to its present level. Remarkably, the total assets held within the protocol have surged to over 3 million ETH, a significant rise from less than 1 million at the start of February.
The notable increase in TVL directly correlates with EigenLayer’s recent policy changes to remove token restaking restrictions and lift TVL limits for individual tokens last month. These adjustments are anticipated by the community to become a fixed part of the protocol later in the year.
EigenLayer’s unique restaking model has also drawn substantial financial backing, including a $50 million Series A funding round in March 2023 led by Blockchain Capital, followed by a $100 million investment from Andreessen Horowitz in February 2024.
Yet, EigenLayer’s swift expansion has led to increased security examinations, leading the project to incentivize researchers with rewards up to $100,000 for identifying medium or higher severity security vulnerabilities on the platform.