• Ethereum liquid restaking TVL surged 6,000%, hitting $17.26B by December 2024.
  • Ether.fi leads the market with a 50% share, holding over $9B in restaked assets.

Liquid restaking on Ethereum has witnessed explosive growth in 2024. The Total Value Locked (TVL) has surged from $284 million at the start of the year to $17.26 billion by mid-December. This remarkable 6,000% increase underscores the growing demand for staked asset utility and capital efficiency in decentralized finance (DeFi). 

Liquid staking allows users to stake assets like ETH and receive derivative tokens, such as stETH, that maintain liquidity. These tokens can be used in trading, lending, or yield farming. Liquid restaking builds on this by enabling users to stake these derivatives to secure additional networks, such as application-specific blockchains or layer-2 solutions. 

The utility of Liquid Restaking Tokens (LRTs) drives this rapid adoption. LRTs simplify complex staking operations and maximize the use of staked assets. By providing higher returns and improved flexibility, they attract DeFi participants seeking better capital efficiency. However, this innovation is not without risks.

Risks Associated 

Derivative tokens, including LRTs, can experience price volatility and depegging. Staking across multiple networks exposes assets to cascading risks. If one network fails, it could impact restaked assets across connected ecosystems. A notable example is the 2022 depegging of Lido’s stETH token, which caused panic among holders.

Among the protocols leading the charge in liquid restaking, Ether.fi dominates with over 50% market share. According to DeFi data aggregator DefiLlama, Ether.fi’s restaked assets now exceed $9 billion. 

DeFi’s resurgence supports this rapid expansion. As of December 2024, the total TVL in DeFi has surpassed $133.88 billion, marking a 150% increase from the year’s start. This growth highlights DeFi’s role as a cornerstone of modern finance. Developments like Bitcoin’s layer-2 networks and rising cryptocurrency prices further reinforce the ecosystem’s expansion.

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