EigenLayer | Ether.fi | Swell | Symbiotic | Karak

• Restaking protocols aim to enhance yield from staked assets by supporting external systems, often called actively validated services (AVSs). These protocols have given rise to billions of dollars worth of liquid restaking tokens (LRTs), which represent deposits in restaking protocols. Interest in restaking grew during the first half of 2024 and has now stablized — total dollar-denominated ETH staked in restaking protocols has declined 38% from its June peak. Adjusting out ETH-USD volatility, ETH units staked have stayed flat over the same period with limited net new flows. Today, there are 23 total AVSs, with liquid restaking representing 75% of total TVL.

• Eigenlayer, the leading restaking protocol, commands an 84% share of the restaking market. Symbiotic, an up-and-comer, is second with 12% and Karak is third with 4%. There's been a -94k ETH net outflow, ~$222M as of Sept. 12, from Eigenlayer over the past month. Karak has had a -14k ETH, $33M, outflow over the same period. Symbiotic is the only protocol with positive change of +253k ETH, $598M.

• Users can both deposit directly into Eigenlayer with ETH and LSTs or indirectly by depositing in liquid restaking projects like Ether.fi. Liquid restaking protocols mint a liquid token, called an LRT, which represent a claim on an asset restaked in a protocol like Eigenlayer — Ether.fi's eETH is the largest LRT enabled by Eigenlayer with 1.96M issued and an $804M market cap. Puffer's pufETH accounts for 515k and Renzo's ezETH for 363k.

• The number of liquid restakers has declined 90% from its February peak of 10k. Of the ~1k remaining liquid restakers, the majority (95%+) are doing so via Ether.fi and Puffer.

• Over the past month, lending protocols saw the highest net positive flow of Ether.fi's weETH/eETH, the leading LRT, with a total inflow of $252M. During the same period, users pushed $52M into bridges, and $39M to EOAs and Safes. The largest net outflow was from restaking, with a decline of $52M primarily driven by a significant outflow of $61M on Aug. 15. This coincided with the launch of eBTC, another LRT from Ether.fi, with supply likely being directed into Symbiotic’s eBTC/weETHs, which may account for some of the outflow.

• So far this year, Aave has grown the most in terms of weETH supply flows, going from 1.4% market share when deposits were enabled in mid-April, to 35% currently. This growth has largely been driven by users engaged in looping strategies with strong demand to borrow stables using weETH as collateral.

• Looking across the DEX environment, TVL for Ether.fi's governance token ETHFI has been growing on Uniswap v3 lately, primarily driven by liquidity on Curve migrating to Uniswap in early August. This was spearheaded by the Ether.fi team who moved treasury-purchased liquidity to Arrakis on Uniswap v3.

• While much of the restaking conversation has been dominated by ETH LRTs, Swell's new LRT, swBTC, has recently emerged. The new product by Swell offers users the chance to capitalize on potential restaking rewards across the top three restaking platforms on Ethereum — EigenLayer, Symbiotic, and Karak. In just 10 days, swBTC TVL surpassed $30M, across 560+ unique depositers. With BTC flows becoming a secular trend, the increased presence of BTC LRTs is likely to be a positive onchain catalyst.

• In roughly a month after launch, a healthy amount of the swBTC supply has already found its way into key DeFi protocols like Curve, and Morpho, constituting roughly 8% of the supply between those two venues. Additionally, Swell is developing a Layer 2 and user have deposited 68% of the swBTC supply to the scaling solution's contract in anticipation of its launch.

• Users are continuing to signal high interest for potential usage through deposits in Swell's Layer 2 contract. Even though Swell announced that the snapshot for an airdrop had already taken place, there is still roughly 460k ETH, $1B+, deposited. The scaling solution is planned to fully launch in late Q4.

• TVL for Symbiotic, the second largest restaking protocol after Eigenlayer, has passed $1.5B with the addition of new assets to the platform like BTC, Ethena, sUSDe and more.

• Vaults like Re7LRT make up more than 70% of depositors, showcasing the growth of liquid restaking tokens on top of the Symbiotic protocol.

• BTC restaking has kicked off in earnest with Symbotic being one of the main locations for depositing BTC. Over $100M in BTC has been deposited in the last month with BTC LRTs from Re7, Ether.fi and Swell contributing to the explosive growth.

• Karak, the third largest restaking protocol by TVL, has maintained a stable 280K ETH in deposits, but has not experienced significant new inflows over the past three months. This may be due to tough market conditions as well as the emergence of competitors like Symbiotic, which launched later than Karak, but now has attracted three times as much ETH. To keep pace, Karak has accelerated the onboarding of additional assets.

• Over the past 7 days, users withdrew 6,025 ETH from Karak, highlighting the lack of growth compared to his competitors. It's possible users are withdrawing because points programs, which Karak has, have been losing appeal.

• This pie chart illustrates that a significant portion of Karak’s TVL is comprised of assets from EigenLayer's LRTs and Pendle's LRT derivatives, totaling 61%. Given this important reliance on competitor assets, Karak may need to explore new strategies to mitigate the risks associated with such dependencies.