Karak, an emerging Ethereum restaking protocol, has experienced a significant increase in its total value locked (TVL), rising over 25% in the past week to reach over $440 million. Industry experts believe that this growth could pose a threat to EigenLayer’s market dominance.
After the disappointment surrounding the EigenLayer airdrop, Karak is now considered to have a “good chance” of becoming the next major restaking protocol. Anndy Lian, an intergovernmental blockchain expert and author of “NFT: From Zero to Hero,” shared this sentiment, stating:
“At the beginning of April, Karak successfully closed a $48 million Series A funding round, which gave the protocol a valuation of over $1 billion. This valuation signifies the potential for further growth. In comparison, EigenLayer currently holds a valuation of $15.7 billion, making it the largest restaking protocol on the Ethereum network.”
Source:
Karak
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The recent release of a white paper by EigenLayer for its upcoming EIGEN token has caused disappointment within the crypto community. The airdrop banned participants from several jurisdictions, including the United States, Canada, and certain African and Asian countries. This decision has been met with widespread criticism. In response, Jay, a pseudonymous crypto trader, highlighted the potential opportunity for Karak in a post on April 29:
“EigenLayer’s decision to exclude participants from key crypto jurisdictions in their airdrop could result in a decrease in TVL as stakers seek out more profitable alternatives.”
Anndy Lian also commented on this situation, stating:
“The airdrop ban imposed by EigenLayer on participants from important crypto jurisdictions may lead to a decline in TVL, as stakers search for more rewarding options.”
Source:
Ran Neuner
Ran Neuner, a crypto analyst and host of the Crypto Banter podcast, went even further, accusing EigenLayer of being a venture capitalist (VC) scam that aims to attract liquidity from inexperienced retail investors. In a post on April 30, Neuner stated:
“EigenLayer’s decision to ban airdrop participants in key unbanked jurisdictions, along with the indefinite lock-up period for airdropped EIGEN tokens, primarily benefits early-stage VC investors.”
While Karak has the potential to become the leading restaking protocol, Alon Muroch, the CEO of SSV.Labs, warns that the introduction of multi-asset restaking could bring about additional protocol risks compared to EigenLayer. Muroch explained:
“Although Karak has the opportunity to become the next dominant restaking protocol, the inclusion of multiple assets in the restaking process may introduce more risks to the protocol, as compared to EigenLayer.”
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