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This Week In DeFi – December 22

This Week In DeFi – December 22

Alex Miguel
December 22, 2023

Happy Friday, DeFi readers!

This week…

EigenLayer surpasses $1B in TVL
Metis announces $100M ecosystem development fund
Trezor adds support for Solana & SPL tokens
Elastos announces Bitcoin L2

EigenLayer surpasses $1B in TVL

EigenLayer's total deposits have surpassed $900 million (and now $1B since the article) following an increase in liquid staking token (LST) caps, with over 410,000 ETH currently locked in the protocol.

The surge in deposits resulted from EigenLayer adjusting its re-staking limits, raising the threshold from 120,000 ETH to 500,000 ETH (approximately $1.1 billion).

EigenLayer facilitates the deposit and re-staking of ether to secure third-party networks, recently expanded its supported LSTs from three to nine.

$1,000,000,000
Less than 48 hrs after raising the caps, EigenLayer TVL has crossed the $1B mark (and counting) at app.eigenlayer.xyz
Thank you to all restakers, operators, and AVSs for joining the mission to hyperscale Ethereum
Just one of many huge milestones to come 🫡
— EigenLayer (@eigenlayer)
4:54 PM • Dec 20, 2023

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Metis announces $100M ecosystem development fund

The MetisDAO Foundation, the organization behind Ethereum Layer-2 rollup Metis, has established a $100 million fund to accelerate the growth of its ecosystem.

The Metis Ecosystem Development Fund (Metis EDF), consists of 4.6 million METIS tokens and is allocated for sequencer mining, retroactive funding, and new project deployment.

Scheduled for distribution in the first quarter of 2024, the fund will support initiatives in NFTs, DeFi and blockchain security, coinciding with the anticipated launch of Metis' decentralized sequencer.

Metis EDF: A new chapter for Metis.
Metis Ecosystem Development Fund (EDF) is a 4,600,000 METIS on-chain fund that will be dedicated to accelerating development and adoption on the Metis ecosystem.
Read more here:
— Metis🌿 (@MetisDAO)
3:23 PM • Dec 18, 2023

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Trezor adds support for Solana & SPL tokens

Hardware wallet provider Trezor has added support for Solana and SPL tokens in its hardware wallets Model T and Safe 3.

This move coincides with a surge in Solana's price, and activity on the network, as SOL reaches a price of over $90 this week.

Google search volume for "Solana" has also seen a rise of 205% between early October and mid-December.

"When Solana?" 🤔
Today is the day, Trezor supports @solana
Both the Trezor Model T and Trezor Safe 3 now support SOL as well as all SPL tokens.
— Trezor (@Trezor)
2:59 PM • Dec 20, 2023

Elastos announces Bitcoin L2

Elastos is launching BeL2, a Bitcoin layer-2 network, aiming to capture a significant share of Bitcoin staking demand by offering more sophisticated transactions – including smart contracts and irreversible digital agreements.

BeL2 allows users to stake their Bitcoin directly on the platform, earning yields while interacting with applications built on BeL2.

With low transaction fees compared to the $10 average for Bitcoin transactions, BeL2 introduces a "smart" aspect to Bitcoin, enabling users to stake their assets and earn interest, addressing the perceived dormancy of Bitcoin reserves between transactions.

Okay that was quick!🔥
As promised, we present you #Bitcoin#Elastos Layer 2, #BeL2 Development Roadmap for Q1 2024.
Thats not all👀! On the article we have a teaser ready for you, *cough cough* @Elacityofficial 😉
📖: elastos.info/blog/bitcoin-s…
— Elastos (@ElastosInfo)
12:00 PM • Dec 21, 2023

LSTs and re-staking hype – what gives?

EigenLayer is a protocol that enables ETH stakers – i.e. those holding liquid staking tokens (LSTs) – to re-stake those tokens for an additional yield, in return for using their LSTs to secure new networks that aren’t necessarily run on Ethereum.

Holders of LSTs like Lido staked ether (stETH), Rocketpool ether (rETH), Coinbase staked ether (cbETH) and others can earn even greater returns on these tokens by placing them into the EigenLayer smart contract. In that smart contract, they’ll be staked to uphold the integrity of other protocols, which could include anything from consensus protocols to oracle networks, data availability platforms, and more.

Of course, this additional yield comes at a cost of additional risks. This includes extra slashing risks (losing their stake if data is vetted inaccurately or maliciously), as well as a whole extra layer of smart contract risks from the EigenLayer protocol.

The launch of EigenLayer is yet another tool for providing value to Ethereum stakers, who have their ETH locked up to secure the blockchain. Although many stakers now have their staking positions “unlocked” via the issuance of LSTs, developers and users are still seeking further ways to create value and use-cases for these tokens. After all, they comprise a significant portion of the ecosystem.

Another recent protocol created to unlock utility for LST holders is Lybra Finance, an interest-generating stablecoin backed by LST tokens. Similar to DAI, users can mint Lybra’s eUSD and peUSD against their LSTs, which can then generate interest for the holder or be used as a stable form of value within the wider DeFi ecosystem.

As LSTs continue to establish their dominance in the Ethereum ecosystem, we can expect several further uses to be created for them – what will be next?