ETH Restaking: Top 5 Projects with Airdrop Potential
Restaking protocols allow users to reinvest ETH to earn additional rewards from DeFi activities. Over the past four months, the total value locked (TVL) in this category has increased 14-fold, and this growth trend is likely to continue.
A major reason for this surge of user interest lies in the airdrop potential. For example, the leading restaking protocol, Ether.fi, recently concluded its first token distribution season, with participants receiving an average of 575 ETHFI tokens (approximately $2000). The second season is still ongoing and will last until June 30.
As of June 2024, Ether.fi is the market leader, accounting for 43% of the total TVL in the sector. However, there are at least 16 other projects that might also offer airdrops. Here are the top 5 to monitor.
Note: In selecting these projects, we focused not on their TVL but on the potential rewards they might offer through airdrops. The largest projects aren’t always the most lucrative for retroactive activities.
As of June 2024, Swell is the 6th largest ETH restaking protocol with a TVL of $450 million. In comparison, Ether.fi, the top protocol in this category, has a TVL of $6 billion.
Users can participate in The Voyage campaign by using Swell's features and interacting with protocols like Balancer, Maverick, Aura, Uni v3, Bunni, and Pendle. These activities earn Pearls, which can be exchanged for SWELL tokens after their launch.
To join The Voyage, visit Swell's official website and navigate to the Voyage page. Scroll down to find the Voyage Map, which outlines the steps needed to earn Pearls.
Swell aims to transition full protocol governance to a DAO over three phases: Set up, Light governance, and Mature governance.
Airdrop hunters are mainly interested in the first phase, which marks the launch of the SWELL token. The project has allocated 8% of the total token supply for the community, with the take-off expected in Q3-Q4 2024.
Puffer Finance implements native liquid restaking (nLRT) rather than liquid restaking (LRT). The difference lies in the use of Ethereum validators’ ETH (transferred to EigenLayer smart contracts) for nLRT, while LRT uses LST and Stake EIGEN. nLRT enhances Ethereum decentralization by integrating new validators and increasing their returns.
There is also a third participant in Puffer Finance operations, the restaking operator (ReOps), who fulfills the AVS demands on behalf of a specific restaking module.
Puffer Finance has raised a total of $24 million from Coinbase Ventures, ConsenSys, and other venture capitalists. Additionally, in January 2024, Puffer Finance received investments from Tier-1 fund Binance Labs. While the company announced the funding, the details remain private.
To participate in a potential Puffer Finance airdrop, visit the project’s website and complete tasks in the Quest section. Users can also engage with the protocol by completing tasks on the cryptocurrency quest platform, Galxe.
The primary asset of Kelp DAO is the liquid restaking token rsETH. This token enables users to earn rewards for staking and restaking Ethereum while maintaining liquidity and participating in DeFi.
Other modules include a Registry, Oracle, and Governance. The Registry monitors operators, services, and assets within the rsETH ecosystem; the Oracle synchronizes the value of other assets with rsETH; Governance translates successful DAO proposals into executable code.
Kelp DAO's TVL stands at $1 billion, ranking it fourth among the largest restaking protocols. In May 2024 alone, its TVL increased by 39%, which is twice the growth rate of Puffer Finance (third place) and Renzo (second place), although 15% less than Ether.fi.
Zircuit is one of the first EVM-compatible ZK-rollups utilizing zk-SNARK technology. Its main feature is preventing hacks through Sequencer Level Security (SLS), a unique solution for tracking malicious transactions in the mempool.
As of June 2024, the project's TVL stands at $3.3 billion, distributed across several assets, including LRT from Renzo, Puffer Finance, Kelp DAO, and others.
At the time of writing, Zircuit is in the testnet phase, with rumors suggesting a mainnet launch by the end of summer 2024. To qualify for a potential Zircuit airdrop, visit the project’s website and stake any of the available tokens. You can also participate in the Build to Earn program for developers.
From April 26 to June 26, users can participate in the second season of Renzo's airdrop. This time, 5% of all tokens have been allocated, including those for participants of the first season. For instance, staking more REZ than received from the airdrop results in a 50% increase in the total ezPoint balance.
The community believes that starting from scratch in Renzo's second season is inefficient for the following reasons:
When engaging with restaking protocols, it's crucial to choose promising projects and wisely allocate your ETH. In the case of Renzo, many recommend committing no more than 20% of your deposit to the protocol. This way, you won't risk much if you miss out on the airdrop, but you'll be pleased if you do receive it.
As of June 2024, Ether.fi is the market leader, accounting for 43% of the total TVL in the sector. However, there are at least 16 other projects that might also offer airdrops. Here are the top 5 to monitor.
Note: In selecting these projects, we focused not on their TVL but on the potential rewards they might offer through airdrops. The largest projects aren’t always the most lucrative for retroactive activities.
Swell Network
Swell, created by Swell Labs, is a protocol designed to expand the possibilities of DeFi through liquid staking and restaking. When users stake tokens, they receive LST tokens dubbed swETH. For restaking, they obtain LRT tokens, known as rswETH (Liquid Restaking Tokens).
As of June 2024, Swell is the 6th largest ETH restaking protocol with a TVL of $450 million. In comparison, Ether.fi, the top protocol in this category, has a TVL of $6 billion.
Top 6 Liquid Restaking Protocols by TVL. Source: defillama.com
In March 2022, Swell Network raised $3.75 million in a seed round, with participation from Tier 2-3 funds, including Framework Ventures, IOSG Ventures, and Maven 11 Capital.
Users can participate in The Voyage campaign by using Swell's features and interacting with protocols like Balancer, Maverick, Aura, Uni v3, Bunni, and Pendle. These activities earn Pearls, which can be exchanged for SWELL tokens after their launch.
To join The Voyage, visit Swell's official website and navigate to the Voyage page. Scroll down to find the Voyage Map, which outlines the steps needed to earn Pearls.
Voyage Map — Earning Pearls in Swell Network. Source: swellnetwork.io
Additionally, users can stake tokens in Swell L2 to earn rewards from both Swell and ecosystem projects like EigenLayer. As of June 2024, Swell L2 is in the pre-launch phase, suggesting early participants might receive additional rewards.
Swell aims to transition full protocol governance to a DAO over three phases: Set up, Light governance, and Mature governance.
Airdrop hunters are mainly interested in the first phase, which marks the launch of the SWELL token. The project has allocated 8% of the total token supply for the community, with the take-off expected in Q3-Q4 2024.
Puffer Finance
Puffer Finance boasts a TVL of $1.7 billion, making it the third-largest restaking protocol. Users can stake their ETH to acquire pufETH, the platform’s native liquid restaking token (nLRT).
TVL Dynamics of Puffer Finance. Source: defillama.com
Puffer Finance is built on the EigenLayer framework. This setup allows validators to distribute their assets across various Actively Validated Services (AVS), potentially earning rewards not only from Puffer Finance and EigenLayer but also from the associated AVS.
Puffer Finance implements native liquid restaking (nLRT) rather than liquid restaking (LRT). The difference lies in the use of Ethereum validators’ ETH (transferred to EigenLayer smart contracts) for nLRT, while LRT uses LST and Stake EIGEN. nLRT enhances Ethereum decentralization by integrating new validators and increasing their returns.
There are two ways to interact with Puffer Finance:
- Become a Node Operator (NoOps): NoOps can join any Puffer module by locking a minimum of 28 Validator Tickets (VT) and 1 ETH as collateral. In return, they get the chance to become Ethereum validators and earn 100% rewards. Each VT represents one day of activity, so NoOps’ activities automatically end after the corresponding number of days.
- Become a Staker: Stakers can contribute any amount of ETH to fund the Ethereum validators managed by NoOp. In return, they receive pufETH.
There is also a third participant in Puffer Finance operations, the restaking operator (ReOps), who fulfills the AVS demands on behalf of a specific restaking module.
Stakers, NoOps, and ReOps create a flywheel effect, allowing Puffer to outpace the growth of traditional liquid staking protocols.
Flywheel Effect of Puffer Finance. Source: puffer.fi
The protocol limits its staking share among all Ethereum validators to 22%. This ensures the network's security, preventing it from exceeding the dangerous threshold of 33% (two-thirds of all validators are needed to confirm transactions in Ethereum).
Puffer Finance has raised a total of $24 million from Coinbase Ventures, ConsenSys, and other venture capitalists. Additionally, in January 2024, Puffer Finance received investments from Tier-1 fund Binance Labs. While the company announced the funding, the details remain private.
To participate in a potential Puffer Finance airdrop, visit the project’s website and complete tasks in the Quest section. Users can also engage with the protocol by completing tasks on the cryptocurrency quest platform, Galxe.
Kelp DAO
Kelp DAO is an Ethereum staking and native liquid restaking protocol on EigenLayer. Kelp DAO integrates with EigenLayer by directing its validators' activities to EigenPods. This allows users who don't have the required 32 ETH to run their own validator node to stake their ETH on Ethereum and restake it on EigenLayer simultaneously.
The primary asset of Kelp DAO is the liquid restaking token rsETH. This token enables users to earn rewards for staking and restaking Ethereum while maintaining liquidity and participating in DeFi.
Key modules supporting rsETH:
- The deposit pool. Converts LST into rsETH and delegates assets among various operators working with Kelp DAO.
- The node delegator module. Transfers liquid staking tokens into the contract of a specific operator.
- Reward market. Offers various strategies for earning rewards, with decisions made by the DAO through voting.
- Withdrawal Manager module. Assists rsETH holders in converting their tokens into assets managed by Kelp DAO.
Other modules include a Registry, Oracle, and Governance. The Registry monitors operators, services, and assets within the rsETH ecosystem; the Oracle synchronizes the value of other assets with rsETH; Governance translates successful DAO proposals into executable code.
Operation Principle of rsETH. Source: staderlabs.com
Kelp DAO's reward system is based on earning Kelp Miles, which evaluate a user's contribution to Kelp's development and determine the distribution proportions for future rewards. Kelp Miles are calculated as follows: 1 Kelp Mile = (Amount of LST in ETH) * (Number of days) * 10,000.
In addition to rewards from Kelp DAO, users earn EigenLayer loyalty points. However, these points are illiquid and cannot be used in DeFi, transferred, or sold. To address this, Kelp DAO introduces KEP, a token equivalent to EigenLayer loyalty points.
As of June 2024, the project team highlights two ways to use KEP: trading on AMM and providing liquidity in KEP/rsETH and KEP/USDC pools. This interaction with DeFi helps users earn additional Kelp Miles.
Kelp DAO's TVL stands at $1 billion, ranking it fourth among the largest restaking protocols. In May 2024 alone, its TVL increased by 39%, which is twice the growth rate of Puffer Finance (third place) and Renzo (second place), although 15% less than Ether.fi.
TVL of the Kelp DAO. Source: defillama.com
Kelp Miles should be earned for airdrop potential in Kelp DAO. To qualify, visit the project's website, convert ETH to rsETH, and add it to various DeFi protocols listed under the “DeFi” tab. The website also features a dashboard, a cross-chain bridge for rsETH exchange, and the option to claim KEP.
Zircuit
After launching its testnet, Zircuit announced the Zircuit Staking program, allowing users to earn Eigenlayer, LRT, and Zircuit Points, along with rewards from staking and restaking. Participants in this activity have the opportunity to receive airdrops, not only from Zircuit itself but also from Eigenlayer and DeFi projects within the ecosystem.
Zircuit is one of the first EVM-compatible ZK-rollups utilizing zk-SNARK technology. Its main feature is preventing hacks through Sequencer Level Security (SLS), a unique solution for tracking malicious transactions in the mempool.
As of June 2024, the project's TVL stands at $3.3 billion, distributed across several assets, including LRT from Renzo, Puffer Finance, Kelp DAO, and others.
TVL Distribution of Zircuit by Tokens. Source: defillama.com
On June 11, 2024, Zircuit held a private funding round with Tier-1 fund Binance Labs. The amount raised remains undisclosed.
At the time of writing, Zircuit is in the testnet phase, with rumors suggesting a mainnet launch by the end of summer 2024. To qualify for a potential Zircuit airdrop, visit the project’s website and stake any of the available tokens. You can also participate in the Build to Earn program for developers.
Renzo
As of June 2024, Renzo's TVL stands at $3.7 billion, making it the second-largest liquid restaking protocol after Ether.fi. Despite this, we've ranked it fifth in terms of retroactive airdrop opportunities due to the upcoming end of Renzo Season 2 and the high competition among airdrop hunters.
Renzo and its TVL. Source: defillama.com
Renzo concluded its first airdrop season on April 26, 2024, and four days later, participants were able to claim their tokens. Initially, 5% of the total REZ supply was allocated for the airdrop, but this was increased to 7% following community feedback. Users with over 360 ezPoints were eligible to receive tokens.
From April 26 to June 26, users can participate in the second season of Renzo's airdrop. This time, 5% of all tokens have been allocated, including those for participants of the first season. For instance, staking more REZ than received from the airdrop results in a 50% increase in the total ezPoint balance.
The community believes that starting from scratch in Renzo's second season is inefficient for the following reasons:
- Deadline: Starting now leaves you only one month to earn ezPoints.
- Fewer Tokens: Only 5% of the total token supply is allocated for the second season airdrop.
- Competition: The project offers many advantages to first-season participants.
