The Eigen Foundation announced that it will allocate 1% of the EIGEN token supply to the Protocol Guild — a group of core developers responsible for maintaining the Ethereum layer-1 blockchain.
According to the Eigen Foundation, the funds will be used to support the continued work of the Protocol Guild, which currently boasts 180 members from 29 teams.
EigenLayer is a restaking protocol on Ethereum, which allows Staked Ether (stETH) and other assets to be repurposed and staked multiple times. This gives investors additional yield opportunities while allowing other protocols to leverage Ethereum’s security.
This role has positioned EigenLayer as a critical component of the Ethereum network’s infrastructure, drawing both praise and concern from the Ethereum community.
EIGEN token one-month price chart. Source: CoinMarketCap
Related: EigenLayer to upgrade restaking rewards
Restaking captures narrative attention
Restaking has been touted as a way to bring fresh capital injections into crypto and has the potential to create a new asset class altogether as restaking becomes an outsourced form of security for blockchain protocols and decentralized applications.
Allowing protocols to use restaked assets for network security alleviates the burden of the protocol having to launch a token to secure the network. This can significantly lower the barrier to entry for developers and decentralized applications.
According to DefiLlama, restaking protocols currently have roughly $26.9 billion in total value locked (TVL). EigenLayer comprises the vast majority of this TVL at approximately $18.2 billion.
Total value locked across liquid restaking protocols. Source: DeFiLllama
The popularity of EigenLayer propelled the EIGEN token to crack the top 100 cryptocurrencies by market capitalization in October. However, the token has since fallen out of the top 100 and is currently ranked 108 by market cap.
In November, EigenLayer expanded its restaking options to include Wrapped Bitcoin products. The update allowed users to deposit uniBTC to the ARPA Network, which is a protocol built on EigenLayer, in return for a yield.
December data from DefiLlama shows the total value locked across the decentralized finance ecosystem is nearing 2021 highs. This surge in total value locked is partially attributed to liquid restaking products and the proliferation of wrapped Bitcoin instruments.
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