introduction

Recently, after the approval of the Bitcoin spot ETF, the market adjustment mechanism was triggered, and the market experienced a phased decline. However, the amount of ETH pledged is constantly increasing, and the demand for restaking is also skyrocketing. Obviously, this is the result of people's expectations that ETH will lead a new round of market.

Under this expectation, Restaking has begun to gain popularity and has attracted more and more attention. Especially after ALT was launched on Binance, its 24-hour increase was close to 58 times. The airdrop targets of ALT (AltLayer) are users participating in Restaking, which fully demonstrates the expected potential of the Restaking business.

ETH ShowTime: Narrative and anticipation go hand in hand

If the recent rising market is a special event for BTC, then the next one is ETH’s Showtime. After all, the approval of BTC spot ETF and the performance of the expected market have already set a good example for ETH to take over. In comparison, ETH seems to meet all the necessary conditions to activate the expected market:

• BTC is about to halve, and ETH is about to usher in the Cancun upgrade;

• BTC spot ETF has been approved, and ETH spot ETF will face approval soon;

• BTC is the strongest consensus in the crypto market, and ETH is the strongest application domain in the crypto industry;

• BTC is the highest value carrier in the crypto market, and ETH is the most dynamic ecosystem with the strongest industry narrative;

Narratives and expectations must complement each other. The only thing missing above is the market expectations of BTC. Inscriptions’ leveraging of the momentum has officially opened up the BTC ecosystem and added richer narrative possibilities to the industry. In the existing ecosystem of ETH, there is no such thing as inscriptions that can provide additional bonuses for new market expectations or even lead the market focus.

The main theme of the ETH ecosystem is the Layer2 sector, which is directly benefited by the Cancun upgrade, and the Restaking ecosystem led by EigenLayer. However, if there is a strong correlation with ETH, it must be Restaking, especially the financial attributes of Restaking, which can not only undertake and expand the existing business framework of LSD, but also further activate the enthusiasm of market funds, making market expectations closer to us. Therefore, Restaking is most likely to become the key focus of the narrative in ETH's ShowTime.

EigenLayer ignites the restaking trend

EigenLayer has been very popular recently. In just over a month, EigenLayer has absorbed more than 700,000 ETH, and its TVL has reached 515.92K ETH (equivalent to about 1.8 billion US dollars), becoming the 12th top protocol on the Ethereum chain. As EigenLayer increases the LST collateral quota, ETH staking has become the focus of the market, and the Restaking trend has been completely ignited.

Let's take a look at the recent EigenLayer related developments:

• On January 11, EigenLayer announced that it would bring its talent to Cosmos, providing re-staking services for Cosmos child chains to obtain the security of Ethereum;

• On January 21, the Ethereum re-staking protocol EigenLayer TVL (locked value) exceeded 1.8 billion US dollars (DefiLlama data);

• On January 23, EigenLayer plans to provide a "shared security" model for DApps, allowing protocols to join the network by utilizing public ETH staking pools;

• On January 24, AltLayer announced the airdrop rules for EigenLayer participants: ETH direct staking users, LST re-staking users, and LRT staking users;

• On January 25, EigenLayer announced the introduction of sfrxETH, mETH and LsETH in the ecosystem, and the removal of the 200,000 ETH personal limit for LST;

• On January 26, Polyhedra Network cooperated with Ethereum re-staking protocol EigenLayer to build a cross-chain protocol from Ethereum to Bitcoin network;

Since the beginning of the month, EigenLayer-related news has come one after another. Whether it is for marketing hype or for the support and construction of the Restaking business, everyone has begun to focus on EigenLayer. In fact, these are all to lay a solid foundation for the subsequent efforts of Restaking, so that Restaking can more easily leverage the entire industry ecosystem and user market.

The rise of Restaking is a necessity

Essentially, Restaking is a common practice in traditional finance. When applied to the crypto market, Restaking on ETH2.0 will make ETH2.0 more financialized. This can be seen as another recognition of ETH's financial attributes, but this recognition is also strongly related to market demand.

First of all, in the crypto market, financial attributes and financial characteristics are a key factor in attracting incremental users and incremental funds, and are also an effective tool to promote market and industry activity. When people have expectations that ETH will lead a new round of market conditions and continue to strengthen this expectation, financial strategies will be given priority. This is the effect of market demand.

Secondly, in the LSD field, compared with traditional finance, the related businesses based on ETH2.0 appear to be too simple and thin. They are not enough in terms of risk resistance or support for market demand, especially the inability to support the narrative of ETH expectations. At the same time, as an LSD business that has essentially been financialized, it has become inevitable to take this opportunity to complete the expansion of the surrounding business and the construction of structured finance.

Therefore, against the backdrop of people's ever-increasing expectations about ETH's market, the rise of Restaking is both a market demand and an inevitable development. Ultimately, it is the improvement of self-narrative capabilities driven by expectations.

Starting from Restaking, it is good for ETH market

Just as Inscription leverages the BTC market to open a new storyline branch for the industry, Restaking will also become a key role in this Showtime. With continuous actions, Restaking has become a very cost-effective investment option. As long as you participate in Staking, you can kill two or three birds with one stone. Just looking at the direction that has already begun to develop, AltLayer, as a hot spot in Layer2, has been bundled and interacted with EigenLayer. EigenLayer's cancellation of the personal upper limit of LST is also providing the market and users with greater operating space, which seems to have begun to pave the way for ETH to dominate a new round of cycles.

Combined with the market's expectations for ETH's market, in the evolution of expectations and narratives, the Restaking trend set off by EigenLayer is inevitable. And Restaking is indeed activating a new round of market cycles, activating ETH's Showtime, and benefiting the ETH cycle, just as people expected.