Total value locked on EigenLayer has dropped by 13% to $15.1 billion in the past 30 days, even though ether is trading at a similar level to June.
Outflows can be attributed to the fickle nature of points farming and the limited returns on restaking protocols.
Ether.fi has bucked the trend, experiencing growth in the period.
Billions of dollars worth of ether (ETH) has been withdrawn from restaking protocols over the past month as the once trendy sector gets its first taste of the fickle nature of crypto investors.
On June 25, ether (ETH) was trading at $3,300, a shade higher than Thursday’s price of $3,200. During that period, however, the total value locked (TVL) on EigenLayer – a protocol that links restaking protocols – slumped by $2.28 billion to $15.1 billion. Restaking protocols like Renzo and Kelp have lost 45% and 22% of their TVL, respectively, data from DefiLlama shows.
A portion of the outflows can be attributed to depositors looking to harvest points that will eventually be converted to airdrops subsequently moving on to another project to maximize returns.
For others, the yield is too low when compared with specific yield-generation protocols like Ethena. Renzo offers an annual yield of 3.43%; Ethena offers more than 10%.
Restaking is a strategy that investors use to secure an additional yield on ETH that is already staked on the main Ethereum blockchain. Protocols like Ethena generate a yield by harvesting funding rates, which can be more volatile.
One restaking project that has managed to buck the trend is ether.fi, which has seen a $100 million increase in TVL.
