Karak, an emerging restaking protocol on the Ethereum network, has experienced a significant increase in its total value locked (TVL) over the past week, surpassing $440 million. This growth has led industry experts to believe that Karak could potentially challenge EigenLayer’s market dominance.
The disappointment surrounding EigenLayer’s recent airdrop has created an opportunity for Karak to emerge as the next prominent restaking protocol. Anndy Lian, an intergovernmental blockchain expert and author of “NFT: From Zero to Hero,” expressed optimism about Karak’s prospects. He stated that Karak has a “good chance” of becoming a major player in the industry.
In April, Karak successfully closed a Series A funding round, raising $48 million and achieving a valuation of over $1 billion. This indicates that Karak has significant upside potential. In comparison, EigenLayer currently holds a valuation of $15.7 billion, making it the largest restaking protocol on the Ethereum network.
EigenLayer’s recent actions have further fueled the belief that Karak could gain market share. The project released a white paper for its upcoming EIGEN token, but it imposed restrictions on participants from various jurisdictions, including the United States, Canada, and certain countries in Africa and Asia. This decision received widespread criticism within the crypto community.
Crypto trader Jay suggested that EigenLayer’s exclusion of key crypto jurisdictions from its airdrop could lead to a decline in TVL as stakeholders seek more lucrative alternatives. Anndy Lian supported this view, highlighting the potential for Karak to benefit from the situation.
Ran Neuner, a crypto analyst and host of the Crypto Banter podcast, went a step further and labeled EigenLayer as a venture capitalist (VC) scam. He argued that the airdrop ban in unbanked jurisdictions, coupled with the team’s decision to lock airdropped EIGEN tokens, primarily benefits early-stage VC investors.
While Karak has the potential to become a leading restaking protocol, Alon Muroch, CEO of SSV.Labs, cautioned that the introduction of multi-asset restaking could also bring about additional risks compared to EigenLayer. Muroch emphasized the need for careful consideration of these risks.
In summary, Karak’s recent growth in TVL positions it as a potential challenger to EigenLayer’s market dominance. The disappointment surrounding EigenLayer’s airdrop has created an opportunity for Karak to gain traction in the industry. However, the introduction of multi-asset restaking introduces its own set of risks that need to be carefully managed.