The hottest narrative in DeFi right now is Eigenlayer's restaking protocol. Over a billion dollars of staked ETH has been committed to Eigenlayer's contract with hopes of receiving points that lead to an airdrop.
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As of writing, more than $27bn worth of ETH is staked in LSD's. It's expected that Eigenlayer could attract upwards of 10-20% of this figure into its restaking protocol. Eigenlayer's Day 1 valuation is expected to be $10bn FDV, meaning the current points system could prove to be extremely valuable.
And yet, sfrxETH has not had the ability to collect Eigenlayer points until just recently. Now a new protocol called Kelp DAO is allowing sfrxETH holders to earn points while still having liquidity for their collateral.
Kelp DAO is founded by Amitej G and Dheeraj B of Stader Labs, a multichain liquid staking platform boasting over $350 million in Total Value Locked (TVL). They are now focusing on building an LRT (Liquid Restaked Token) solution called rsETH on EigenLayer for Ethereum.
What is rsETH?
rsETH is an LRT that is designed to provide liquidity for assets that have been deposited into restaking platforms, such as EigenLayer. rsETH allows for deposits of various LSD's and then restakes them in Eigenlayer's contract for points. When Eigenlayer operationalizes points in the future in the form of a token or protocol mechanics, KelpDAO will distribute the points among its takers.
How Does rsETH Work?
rsETH works as follows:
- LSDs are deposited into their contracts and, in return, rsETH tokens are minted against it, signifying fractional ownership of the underlying assets.
- When Eigenlayer opens their window for deposits, KelpDAO then transfers the tokens into their contracts.
- Rewards accumulate to rsETH holders
- rsETH holders have the option to either swap their tokens for other assets for instant liquidity or choose to redeem the underlying assets through rsETH contracts.
- rsETH holders can also use their tokens in DeFi for leverage or loans.
Fees for rsETH
At present, Kelp DAO does not charge any fees on deposits. This means that users can freely deposit ETHx, sfrxETH, and stETH on the Kelp dApp without incurring any charges.
Kelp Miles & EigenLayer Points
Kelp DAO uses a reward system called Kelp Miles to track points and deposits using the following formula:
Kelp Miles = (Amount of ETH worth of LST) * (Number of days) * 10,000.
Restakers who deposit LSD's between December 12th, 2023, and January 1st, 2024, received 1.25x boosted miles for the following 3 months. Those restaking after January 1st, 2024, do not receive the boost. Accumulated Kelp miles do not expire.
Users who successfully restake with Kelp before the deposit caps on EigenLayer close are eligible to receive Restaked Points, distributed proportionally to the amount of LST deposited.
Kelp DAO's Referral Program
Kelp has a great referral program for anyone who wants to help them grow. It provides:
- Users restaking using a referral link receive 10% extra Kelp Miles.
- The referrer receives 10% of the Kelp Miles earned by the referred user.
- If the referred deposit amount surpasses 1000 ETH, the referrer receives 20% of the Kelp Miles.
How to Restake sfrxETH with Kelp DAO
- Go to KelpDAO using Flywheel's referral code
- Connect wallet
- Choose how much you want to stake
- Approve and send the transaction! Very easy.
Once you deposit sfrxETH in to Kelp DAO's contracts, you will be able to go to the Dashboard page and see how many Kelp Miles and EL Restaked Points you have. It will update on an hourly basis, so if you don't see anything right away, just wait a bit.