EigenLayer, the decentralized protocol for layer 2 scaling solutions, has announced that its total value locked (TVL) has reached nearly $6 billion after it temporarily removed the cap on its deposits. This is a remarkable achievement for the project, which aims to provide fast, cheap and secure transactions for various DeFi applications.
The cap removal was a response to the high demand from users who wanted to migrate their assets from Ethereum to EigenLayer, which uses optimistic rollups to reduce gas fees and latency. The cap was initially set at $50 million per week, but it was quickly reached by eager depositors. To accommodate the growing demand, EigenLayer decided to remove the cap for 48 hours, starting from February 10 at 12:00 UTC.
The result was a massive influx of liquidity into the protocol, as users deposited over $5.9 billion worth of ETH, USDC, DAI and other tokens. According to DeFi Pulse, Eigen Layer’s TVL jumped from $271 million on February 9 to $5.96 billion on February 12, making it the third largest DeFi protocol by TVL, behind only Maker and Aave.
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Eigen Layer’s co-founder and CEO, Dr. Alice Chen, expressed her gratitude and excitement for the community’s support in a blog post. She said:
“We are overwhelmed by the enthusiasm and trust that our users have shown us. This is a clear sign that the DeFi space is hungry for scalable solutions that can handle the increasing volume and complexity of transactions. We are proud to offer such a solution with EigenLayer, which leverages the security and decentralization of Ethereum, while enhancing its performance and user experience.”
Dr. Chen also assured the users that the cap removal was a temporary measure, and that EigenLayer will resume its gradual and controlled launch process soon. She explained that the cap was necessary to ensure the stability and security of the protocol, as well as to comply with the regulatory requirements in different jurisdictions. She added:
“We are working hard to make EigenLayer accessible to everyone, but we also have to be careful and responsible. Scaling Ethereum is not a trivial task, and we have to take into account various technical, legal and economic factors. We appreciate your patience and understanding as we navigate this complex landscape.”
EigenLayer is one of the most anticipated projects in the DeFi space, as it promises to solve some of the most pressing challenges that Ethereum faces today. By using optimistic rollups, EigenLayer can process thousands of transactions per second, with near-instant finality and minimal fees. This makes it ideal for applications that require high throughput and low latency, such as decentralized exchanges, lending platforms, gaming and NFTs.
EigenLayer also offers a seamless user experience, as it allows users to interact with their favorite DeFi apps without leaving their wallets or changing their addresses. Users can simply deposit their assets into Eigen Layer’s smart contracts, and then use them on any compatible app on Eigen Layer’s network. When they want to withdraw their assets back to Ethereum, they can do so with a simple click of a button.
EigenLayer is not only compatible with Ethereum, but also with other layer 1 blockchains that support EVM-compatible smart contracts, such as Binance Smart Chain, Polygon and Avalanche. This means that users can enjoy cross-chain interoperability and access a wider range of DeFi opportunities across different ecosystems.
EigenLayer is currently in its beta phase, and it plans to launch its mainnet in Q2 2024. The project has already secured partnerships with some of the leading DeFi projects, such as Uniswap, Compound, Aave, Synthetix and Curve. It has also raised over $40 million in funding from prominent investors, such as Andreessen Horowitz, Polychain Capital, Paradigm and Coinbase Ventures.
EigenLayer’s vision is to become the ultimate layer 2 scaling solution for DeFi and beyond. By offering fast, cheap and secure transactions for any application on any blockchain, EigenLayer aims to unlock the full potential of decentralized finance and enable mass adoption.