Karak, an emerging Ethereum restaking protocol, has experienced significant growth in its total value locked (TVL), surpassing $440 million in the past week. This increase has led industry experts to believe that Karak could potentially challenge EigenLayer’s market dominance.
Following the disappointment surrounding the EigenLayer airdrop, Karak has emerged as a strong contender to become the next major restaking protocol. Anndy Lian, an intergovernmental blockchain expert and author of “NFT: From Zero to Hero,” believes that Karak has a “good chance” of achieving this status. Lian stated, “At the beginning of April, Karak successfully concluded a $48 million Series A funding round, resulting in a valuation of over $1 billion. This indicates that Karak has significant upside potential.” In comparison, EigenLayer, currently the largest restaking protocol on Ethereum, has a valuation of $15.7 billion.
The disappointment surrounding the EigenLayer airdrop occurred when the project released a white paper for its upcoming EIGEN token, which excluded several jurisdictions from participating, including the United States, Canada, and various African and Asian countries. This decision faced widespread criticism within the crypto community. A pseudonymous crypto trader known as Jay highlighted this as a significant opportunity for Karak, stating, “EigenLayer’s decision to exclude participants from key crypto jurisdictions may result in a decline in TVL as stakers seek more lucrative alternatives.”
According to Lian, this exclusionary approach could lead to a decrease in liquidity, affecting EigenLayer’s market standing. Additionally, crypto analyst and Crypto Banter podcast host Ran Neuner accused EigenLayer of being a venture capitalist scam designed to attract liquidity from inexperienced retail investors. Neuner argued that the airdrop ban and the decision to lock airdropped EIGEN tokens favor early-stage VC investors.
While Karak has the potential to become the leading restaking protocol, Alon Muroch, CEO of SSV.Labs, warns that multi-asset restaking could introduce additional risks compared to EigenLayer. Muroch stated, “It is essential to consider the potential protocol risks associated with multi-asset restaking when evaluating Karak’s rise to prominence.”
In related news, Lido Finance recently reached one million validators, contributing to the growth of decentralized finance (DeFi).