EigenLayer exodus leads wider decline in the restaking sector

On July 11, EigenLayer experienced the largest single-day net outflows in its history, with over $135 million worth of net outflows, translating to approximately 43,550 ETH at that time.

Meanwhile, EigenLayer saw over $68 million worth of net outflows last week after taking into account the inflows that occurred on certain days.

These net outflows, which have not been isolated incidents over recent weeks, have led to the total value locked (TVL) in EigenLayer to fall by about 27% from its all-time high of $20.1 billion in early June to $14.66 billion at the time of writing. This has resulted in EigenLayer losing over $5.4 billion worth of TVL in just over a month.

This downward trend is not exclusive to EigenLayer. The wider restaking sector has also seen notable declines in TVL in recent weeks. Renzo, for example, has lost nearly half its TVL in just a month, plummeting from $4.07 billion in early June to $2.09 billion now. Other restaking protocols, including Puffer, KelpDao, Swell, and Eigenpie, have lost, on average, 22% of their TVL during this period.

The decline in TVL can be attributed to several factors, with the most significant one likely being the announcement or launch of the largest restaking protocols’ respective tokens, such as Renzo with REZ and EigenLayer with EIGEN, marking the end of their respective airdrop campaigns. This has likely disincentivized farmers, leading to capital rotating out of these protocols into more promising airdrop farms.

Interestingly, restaking protocols that have not announced a token launch and still have ongoing airdrop campaigns, such as Swell, have also experienced a notable decline in TVL. This could be attributed to market sentiment viewing Swell as an underwhelming airdrop opportunity, leading airdrop speculators to deploy their capital elsewhere. Additionally, the restaking sector might be perceived as oversaturated, further contributing to the decline.

This is an excerpt from  The Block's Data Insights newsletter . Dig into the numbers making up the industry’s most thought-provoking trends.