- Ethereum liquid restaking TVL increased to $17.26 billion in 2024.
- Ether.fi has a 50% market share and more than $9 billion in assets.
Ethereum’s liquid restaking ecosystem has grown exponentially in 2024, with the Total Value Locked increasing by a startling 6,000% to around $17.26 billion by mid-December. Evidence of growing demand for liquid and capital efficiency in decentralized finance, is up from merely $284 million at the commencement of the year, signaling the fast growth of liquid restaking and its growing relevance within DeFi.
Liquid staking enables Ethereum holders to lock in their assets, such as ETH, for earning derivative tokens called stETH. These derivative tokens retained liquidity, enabling users to utilize them across a wide scope of DeFi activities. From trading to lending and yield farming, the ability of users to stake these derivatives in other networks such as application-specific blockchains and layer-2 solutions further generates additional demand and adoption.
Evolving Liquid Restaking of Ethereum
One of the driving forces of such growth is Liquid Restaking Tokens or LRTs. They come with additional flexibility and returns that make it a very enticing feature to DeFi participants, looking to improve capital efficiency even further. The tokens have helped streamline staking operations while opening new avenues for asset uses and hence form one of the biggest factors driving the rapidly rising TVL.
However, with any financial innovation, there is always the risk involved. Derivative tokens like LRTs are vulnerable to price volatility and de-pegging. This will create cascading risks in the interconnected networks. One such risk came into existence in 2022, when Lido’s stETH token started depegging, spreading panic among the holders.
Ether.fi accounts for most of the liquid restaking market shares, with an above 50% market share for over $9 billion worth of the restaked assets. DeFi also catapulted the entire space into the stratosphere, reaching a record-breaking TVL of $133.88 billion in 2024 by the end of the year, up 150% from the beginning of the year. Such gains are pushed to the limits by the increased expansion of other development features, such as layer-2 for Bitcoin networks and cryptocurrency values. The higher they go, the more DeFi becomes an intrinsic part of the new world of banking.
Restaking is doing well in liquid form, therefore Ethereum appears to be robust and viable within the DeFi ecosystem. It creates new opportunities but also poses threats to investors and users.
