The recent increase in Ethereum’s price has coincided with EigenLayer’s total value locked surpassing Aave’s.
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For the first time since December 2021, Ethereum, the second-largest digital asset by market capitalization, is trading close to the critical $4000 milestone after rising 15% over the previous week.
DeFillama data indicates that EigenLayer, the leading restaking protocol, is currently the second-largest DeFi protocol in terms of total value locked, following this price rally.
ETH’s price
Currently trading at $3954, Ethereum has gained 4% in value over the last day, as per data from CryptoSlate.
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The excitement surrounding the impending Dencun upgrade, which is expected to go live on the mainnet by March 13, may be connected to Ethereum’s recent increase in value. Proto-danksharding, a calculated move to reduce transaction costs for layer-2 blockchains and address scalability issues head-on, is brought to Ethereum by Dencun.
Furthermore, the market is expecting the US SEC to potentially approve a spot Ethereum ETF. If this approval is granted, it may act as a major trigger, increasing the current price increase even more.
TVL of EigenLayer soars
During the week, EigenLayer’s TVL surpassed Aave’s TVL of $11.4 billion, reaching an all-time high of $11.7 billion.
Notably, according to blockchain analysis company IntoTheBlock, the protocol saw an astounding $790 million positive change in TVL on March 5, which was its highest daily surge since February 9.
EigenLayer’s TVL has grown at an impressive rate, particularly over the last 30 days, when it has increased five times from about $2 billion at the beginning of the previous month to its current value. The total assets locked on the protocol have increased dramatically from less than 1 million ETH at the beginning of February to over 3 million ETH.
The increase in TVL is a direct result of EigenLayer’s decision last month to remove TVL caps for individual tokens and lift restrictions on token restaking. Residents of the community anticipate that these modifications will become permanent later this year.
Significant investments were made in EigenLayer in the meantime thanks to its unique restaking model, most notably a $50 million Series A funding round headed by Blockchain Capital in March 2023 and a $100 million investment from Andreessen Horowitz in February 2024.
But because of the increased security scrutiny brought about by EigenLayer’s quick expansion, the project is offering up to $100,000 in rewards to researchers who find medium- or higher- severity security flaws on the platform.
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