EigenLayer Allows Bitcoin Restaking: New Incentives

EigenLayer, a renowned re-staking platform with a TVL of $10.8 billion, has just announced the addition of Bitcoin as an active deposit asset.

Thanks to cooperation with the decentralized autonomous organization Threshold Network, tBTC, a derivative of BTC on the Ethereum network, appeared on the platform.

This is a major milestone for EigenLayer, opening the door for the first time to economic incentives to calm the network through Bitcoin’s recapture.

The demand for this type of product could immediately reach very high levels, given the success recorded in the protocols of other competitors.

Let’s see all the details of the news below.

EigenLayer begins retaking Bitcoin with tBTC on its platform in collaboration with Threshold Network

According to the latest cryptographic updates, EigenLayer introduced Bitcoin re-staking in its app, allowing tBTC deposits.

The asset in question is an equivalent version of BTC developed by Threshold Network, the value of which reflects a 1:1 relationship with the underlying asset.

For every BTC deposited into the Threshold Network, tBTC is issued, which can potentially be traded on Kraken and other decentralized exchanges.

This resource is already quite widespread on the market and has capitalization 200 million dollars. Some 3,411 bitcoins were locked at the crypto provider at 1,432 different addresses.

tBTC, active since January 2023 but only rising sharply this year, represents 2.1% of supply “packaged bitcoin token» on Ethereum,

Source: https://dashboard.threshold.network/tBTC/mint

Its entry into EigenLayer pools represents a major milestone in the world of restaging as it opens up numerous hybrid opportunities in DeFi.

First of all, the platform marks the first introduction of a currency that reflects the value of Bitcoin, with incentives in the associated tokens.

Then this new model opens the doors new scenarios in which economic security is guaranteed by Bitcoin restaker rates

Thus, on the one hand, the search for capital maximization is carried out through the ownership and use of the most capitalized cryptocurrency in the world.

On the other hand, a new type of cryptographic stability is offered in Proof-of-Stake of Ethereum, which is diversified and improved with less unpredictable collateral.

The pool in tBTC is already running on EigenLayer, but only 0.02 bitcoins were deposited during the re-staking.

There will likely be a significant increase in user deposits into tBTC from now on, given the rewards offered as prizes.

Source: https://app.eigenlayer.xyz/?flow=true

New important incentives on EigenLayer

Bitcoin Derivative tBTC Debuts on EigenLayer Market Opens Up Opportunities new investment opportunities in the Ethereum restaking sector.

In addition to the launch of its token, Threshold Network DAO announced that it will offer economic incentives of up to $45,000 in T tokens for the first 3 months.

Users who contribute tBTC to EigenLayer will now receive a share of the Threshold project’s governance coin.

Obviously, the more participants there are, the less attractive the incentive becomes for the staker who does not receive a native reward.

In any case, the integration of the Bitcoin wrapped resource into Eigenlayer represents a decisive step towards more efficient management of your crypto portfolio.

The flexibility with which the resource is integrated into the Ethereum ecosystem also creates a competitive advantage over canonical restaging practices in terms of diversification.

Here’s how McClain Wilkison, a Threshold employee, commented on the news:

“This is a testament to the strength of tBTC in protecting the BitcoinFi ecosystem through diversification of available assets. To date, major protocols including Curve, GMX and Compound, among others, have integrated this resource due to its flexibility as one of the most decentralized packaged assets on the market.”

We should also not forget that the “stability” of BTC as the most capitalized asset in the sector provides greater protection for investors.

Following the emergence of Bitcoin staking projects such as Babylon, Lombard and Acre, EigenLayer’s adoption of tBTC is evidence that Bitcoin restaging is helping to encourage users to use Bitcoin for more than just a store of value.. tBTC’s ability to bridge the Bitcoin and Ethereum ecosystems makes it an optimal solution for the development of the BitcoinFi ecosystem.

Sriram Kannan, founder and CEO of Eigen Labs, expressed optimism about the news:

“The inclusion of Threshold’s tBTC as a recoverable asset in EigenLayer is another important step forward in open innovation by forging connections with the Bitcoin ecosystem, expanding the range of assets that can help secure decentralized networks, and providing greater opportunity and utility for AVS and restakers”

Bitcoin and DeFi: distribution of BTC deposited during restaking

While tBTC turns out to be the first Bitcoin-denominated asset to offer incentives on EigenLayer, we cannot say the same about the broader restaging landscape.

Currently, as stated on Dune Analytics “MayBeJonas“, During the restaking, approximately 11,657 BTC worth $682.5 million were locked.

We are talking about a share of less than 0.05% of all BTC currently in circulation on the original chain. Thus, this is a market trend that should not be ignored, considering also the potential of Airdrop, but it does not compromise the security of the cryptographic network.

Source: https://x.com/Mars_DeFi/status/1835690743295275238

The most commonly used protocols for retaking Bitcoin are Symbiotic, Babylon, Swell, Pell and Mellow. The first two have the greatest liquidity and are most often chosen by the users themselves. In particular, on Symbiotic there is a 1980 BTC restake. of which 1650 are in WBTC, 165 in LBTC and 104.8 in tBTC. Instead, we find 9,902 BTC locked on Babylon.

With the arrival of tBTC on Eigenlayer, we may also see this latest platform join the above list.

We emphasize that in Babylon, TVL depends on various secondary protocols that perform liquid re-capture of resources in Bitcoin.

The main ones are Lombard with a share of 51.6%, Solv Protocol with 32.8%, pumpBTC with 9.9% and Bedrock with 3.3%. There are also minority shares in Lorenzo and BabyPie.

Most of these platforms offer special airdrop rewards for early users who deposit assets during these months.