Introducing Liquid Staking and Restaking Dashboards on AmberLens

Ethereum has undergone significant updates over the past few years. With the introduction of the Beacon Chain and the Merge, Ethereum made the shift from Proof of Work (PoW) to Proof of Stake (PoS). This fundamentally changed how Ethereum is secured and how validators are rewarded, emphasizing staking rather than mining.

Previously, validators had to lock up at least 32 ETH to participate, which they could not withdraw until the Shanghai update was implemented. This early system meant a user’s ETH was tied up indefinitely, impacting the liquidity of validators' assets. Post-Shanghai, validators can now withdraw their staked ETH. This influences the overall staking yield as more validators mean less yield per validator.

Liquid staking was introduced to tackle the liquidity issue and the high entry threshold of 32 ETH. Liquid staking allows users to participate in staking by depositing their ETH with a liquid staking provider, who then stakes on their behalf. These providers issue Liquid Staking Tokens (LSTs) in return, which represent the staked ETH plus earned rewards and minus any fees. LSTs can be used just like regular ETH for trading, lending, and other DeFi activities, making your staked ETH work harder and smarter. Each liquid staking protocol is slightly different with varying trade-offs, and any users need to do their research.

Introducing Liquid Staking and Restaking Dashboards

Amberdata is excited to announce the launch of our comprehensive Ethereum Liquid Staking Dashboard on our market intelligence platform AmberLens. This tool provides an in-depth view of the Ethereum staking ecosystem. It covers leading protocols including Rocket Pool ETH, Lido stETH, Coinbase cbETH, Binance wbETH, Swell Protocol swETH, Ankr ankrETH, and Liquids lsETH. Additionally, the dashboards offer unique insights into the newest DeFi primitive, EigenLayer restaking. This DeFi data empowers traders, researchers, and investors to fully analyze yields on liquid staking tokens and help maximize their Ethereum staking strategies. 

Liquid Staking

Using Amberdata’s on-chain data, we calculated the average APY, which allows us to compare the relative tradeoff between different liquid staking protocols.

Looking at our liquid staking APY charts, we can see that natively staking Ethereum offers the highest yield among various staking options. However, this approach also requires greater capital investment and a more sophisticated understanding of the technical aspects involved in staking. By leveraging this data, investors and traders can effectively create strategies for managing liquid staking tokens. In turn, this enables them to optimize their yield while simultaneously mitigating potential risks. 

Retaking with EigenLayer

A benefit of LSTs is that they can also be restaked, or used to secure other networks aside from Ethereum, through protocols like EigenLayer. This can offer additional rewards and enhance the capital efficiency of investments.

We can analyze the restaking environment and see how much is locked in the Eigenlayer.

By analyzing the Total Value Locked (TVL) and growth trajectory of EigenLayer, we get a lens into the sentiment surrounding the protocols. The data indicates a steady and consistent growth across the protocol. This growth remains consistent and the TVL is constant behind the announcement of the EigenLayer token $EIGEN. As more protocols begin to build upon EigenLayer, the potential for an increase in TVL and drive growth further seems compelling. 

Once ETH and liquid staking tokens are staked with EigenLayer, users can then delegate their assets to Operators who will end up being the nodes that operate and support Actively Validated Services (AVS).

Staked ETH can be strategically allocated to various operations on EigenLayer. These operators provide support for Actively Validated Services (AVS) built on top of the EigenLayer.  By analyzing the allocation of staked ETH to different operators, investors can gain valuable insight into the distribution strategies employed by the user base. Many operators are signaling their intent to share fees or airdrops with their users, which may influence investors’ allocation decisions. This data can also reveal the ratio of staked ETH to the number of users, providing a clear picture of the distribution of the user base across different operators. This is crucial for identifying concentration within certain operators, enabling investors to make more informed decisions and manage their exposure to potential risks effectively.