EigenLayer on the brink of potential yield crisis

Liquid staking tokens on EigenLayer will require more utility in the decentralized finance space to avoid a potential yield crisis in the future.

EigenLayer, the largest restaking protocol on Ethereum by total value locked (TVL), could be facing a “major” yield crisis, according to industry watchers.

Due to EigenLayer’s rapid growth in TVL, the protocol may be outgrowing its Actively Validated Services (AVS), which could lead to a major yield reduction, according to Chudnov, a pseudonymous builder at 3Jane derivatives exchange. He wrote in an April 22 X post:

EigenLayer removed the limits on all liquid staking tokens (LSTs) on April 16, according to an X announcement. EigenLayer launched on mainnet on April 10.

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