The LRT (Liquidity Restaking Token) track is one of the few popular sectors in the crypto market before the Spring Festival.
The LRT protocol is a staking yield amplification protocol based on the Restaking protocol EigenLayer. The gameplay is the same as the double mining in DeFi Summer that year.
The LRT protocol supports users to pledge LST (stETH, wstETH) assets or ETH itself to the protocol, while mining EigenLayer points and the LRT protocol’s own points.
Originally, in everyone’s mind, the LRT track was just a DeFi Degen game that repeatedly stacked Lego without any actual value support.
However, as the industry's overall understanding of the DA layer has been upgraded, the value of EigenDA, the first AVS instance of the Restaking protocol EigenLayer, has been recognized by the market, and everyone has realized that LRT can help enhance the economic security of AVS.
This has finally allowed the LRT track to find value support and application scenarios.
The latest architecture of the LRT track is as follows:
--Native Staking
--LST protocol and Restaking protocol (EigenLayer supports LST protocol and native staking)
--Balancer (LST protocol token pricing market) and Pendle (LST protocol token interest pricing market)
--LSDfi (mainly Lybra, Prisma, Raft, etc. CDP stablecoin protocols with LST protocol tokens as collateral)
--EigenDA (the first AVS instance of EigenLayer, the DA layer in the Ethereum ecosystem, and a competitor of Celesita’s DA layer)
--LRT (KelpDAO, Ether.fi, Renzo, etc., support dual mining of EigenLayer points and LRT protocol points)
Overall, the LRT track is a rapidly growing niche market, from a TVL of 8,000 ETH in November 2023 to a TVL of 217,000 ETH today.
However, one thing that needs to be noted is that the LST protocol tokens with a scale of tens of billions of dollars are actually deposited in large quantities in DeFi lending protocols such as AAVE, MakerDAO, and Summer, and those flowing into LSDfi and LRT are only tributaries.