EigenLayer and Ether.fi have both transformed; has the staking narrative come to an end?

Written by: Fairy, ChainCatcher

Editor: TB, ChainCatcher

In the first half of 2024, the concept of secondary yield sparked a frenzy in the market, and "re-staking" became a core topic sweeping the crypto ecosystem. EigenLayer rose, and projects like Ether.fi and Renzo emerged one after another, with re-staking tokens (LRT) blooming everywhere.

However, both leading projects in the field have chosen to transform today.

Ether.fi announces its transformation into a new type of crypto bank (neobank), planning to launch cash cards and staking services for US users;

Eigen Labs announced a layoff of about 25%, restructuring resources to fully focus on the new product EigenCloud.

The once-hot "re-staking" is now at a turning point. Do the strategic adjustments of the two major leaders signal that this track is heading towards obsolescence?

Emergence, Tide and Clearance

In the past few years, the re-staking sector has experienced a cycle from conceptual trials to a surge of capital influx.

According to RootData, there are currently over 70 projects that have emerged in the re-staking sector. EigenLayer, part of the Ethereum ecosystem, is the first project to bring the ReStaking model to market, leading to a collective explosion of liquidity re-staking protocols such as Ether.fi, Renzo, and Kelp DAO. Subsequently, new architectural projects like Symbiotic and Karak have also appeared one after another.

In 2024, the number of financing events surged to 27, raising nearly 230 million dollars throughout the year, making it one of the hottest sectors in the crypto market. As we enter 2025, the pace of financing begins to slow down, and the overall enthusiasm for the sector gradually cools.

At the same time, the reshuffling of the track is accelerating. Currently, 11 projects including Moebius Finance, goTAO, and FortLayer have successively ceased operations, and the early bubble is gradually being cleared.

Currently, EigenLayer remains the dominant player in the field, with a TVL of approximately $14.2 billion, capturing over 63% of the market share in the entire industry. Within its ecosystem, Ether.fi holds about 75% of the share, while Kelp DAO and Renzo account for 12% and 8.5%, respectively.

Narrative Weightlessness: Cooling Signals Behind the Data

As of now, the total TVL of the re-staking protocol is approximately $22.4 billion, a decrease of 22.7% compared to the historical peak in December 2024 (approximately $29 billion). Although the overall locked volume remains high, there are signs of a slowdown in the growth momentum of re-staking.

Image source: Defillama

User activity has declined more significantly. According to The Block data, the daily active deposit users for Ethereum's liquid staking have sharply dropped from a peak of over a thousand in July 2024 to just over thirty currently, while the daily unique deposit addresses for EigenLayer have even fallen to single digits.

Source of the image: The Block

From the validator's perspective, the attractiveness of re-staking is also diminishing. Currently, the daily active re-staking validators on Ethereum account for less than 3% compared to regular staking validators.

In addition, the token prices of projects such as Ether.fi, EigenLayer, and Puffer have all retraced more than 70% from their highs. Overall, although the restaking sector still retains a certain size, user activity and participation enthusiasm have significantly declined, and the ecosystem is entering a state of "weightlessness." The narrative-driven effect has weakened, and the growth of the sector has entered a bottleneck period.

Head project transformation: Is the re-staking business no longer viable?

When the "airdrop period dividends" fade and the enthusiasm for the track diminishes, the expected return curve tends to smooth out, and the staked projects will inevitably face the question: how can the platform achieve long-term growth?

Take Ether.fi as an example. It achieved over $3.5 million in revenue for two consecutive months by the end of 2024, but by April 2025, revenue fell back to $2.4 million. In the reality of slowing growth momentum, a single restaking function may find it difficult to support a complete business narrative.

It was also in April that Ether.fi began to expand its product boundaries, transforming into a "new type of crypto bank", building a closed loop of financial operations through real-world scenarios such as "bill payments, salary disbursement, savings, and consumption". The dual-track combination of "cash card + re-staking" has become a new engine for trying to activate user stickiness and retention.

Unlike Ether.fi's "application layer breakthrough," EigenLayer opts for a reconstruction that leans more towards the infrastructure strategic level.

On July 9th, Eigen Labs announced a layoff of about 25% and will focus resources on the new product developer platform EigenCloud, which has also attracted a new round of $70 million investment from a16z. EigenCloud integrates EigenDA, EigenVerify, and EigenCompute, aiming to provide a universal trust infrastructure for on-chain and off-chain applications.

The transformation of Ether.fi and EigenLayer, while differing in paths, essentially points to two solutions of the same logic: turning "re-staking" from an end narrative into a "starting module," transforming the goal itself into a means of building more complex application systems.

Re-staking is not dead, but its "single-threaded growth model" may be difficult to continue. It can only continue to attract users and capital when it is embedded in a narrative of applications with greater scale effects.

The mechanism design of re-staking tracks to ignite market enthusiasm with "secondary income" is now seeking new points of application and vitality in a more complex application landscape.