EigenLayer Outflows of $2.3B Signal Restaking Sector Slide

The yield offered by restaking is dwarfed by the likes of yield-generating platform Ethena.

Ether (ETH) outflows from restaking protocols have reached $2.3 billion in the past month as the once-booming sector faces the reality of crypto investors’ fickle nature.

On June 25, ether (ETH) was trading at $3,300, a touch higher than Thursday’s price of $3,200. But in that time, the total value locked (TVL) on EigenLayer – a protocol that links restaking protocols – has slid by $2.28 billion to $15.1 billion. Restaking protocols like Renzo and Kelp have lost 45% and 22% of their TVL, respectively, according to data from DefiLlama.

Some of the outflows can be attributed to depositors looking to harvest points that will eventually be converted to airdrops, then moving on to another project to maximize returns.

For others, the yields are simply too low when compared with those of certain yield-generation protocols, such as Ethena. Renzo offers an annual yield of 3.43%; Ethena offers more than 10%.

Restaking is a strategy that investors use to secure an additional yield on ETH that is already staked on the main Ethereum blockchain. Protocols like Ethena generate a yield by harvesting funding rates, which can be more volatile.

One restaking project that has managed to buck the trend is ether.fi, which has seen a $100 million increase in TVL.