Karak, an emerging restaking protocol on the Ethereum network, has experienced a significant increase in its total value locked (TVL) by more than 25% in the past week, reaching over $440 million. This growth has led industry experts to believe that Karak has the potential to challenge EigenLayer’s dominance in the market.
After the disappointment surrounding the EigenLayer airdrop, Karak has been identified as having a “good chance” of becoming the next prominent restaking protocol. Anndy Lian, an intergovernmental blockchain expert and author of “NFT: From Zero to Hero,” shared his perspective on the matter, stating, “Karak’s recent Series A funding round of $48 million, which valued the protocol at over $1 billion, indicates its upward potential. In comparison, EigenLayer holds a valuation of $15.7 billion, making it the largest restaking protocol on Ethereum.”
The release of EigenLayer’s white paper for its upcoming EIGEN token on April 29 brought about controversy as it excluded several jurisdictions, including the United States, Canada, and various African and Asian countries, from its airdrop. This decision was met with widespread criticism from the crypto community. Notably, Jay, a pseudonymous crypto trader, highlighted the opportunity this created for Karak, stating, “EigenLayer’s choice to exclude participants from key crypto jurisdictions in the airdrop may cause stakers to seek more lucrative alternatives.”
Anndy Lian echoed this sentiment, suggesting that EigenLayer’s decision could lead to a decline in TVL as stakeholders look for alternative options. In an April 29 post, he stated, “This could be a significant opportunity for Karak.”
Crypto analyst and Crypto Banter podcast host, Ran Neuner, went further to criticize EigenLayer, describing it as a venture capitalist (VC) scam that aims to attract liquidity from inexperienced retail investors. He expressed his concerns in an April 30 post, asserting that the decision to ban airdrop participants from unbanked jurisdictions and to lock the airdropped EIGEN tokens in favor of early-stage VC investors.
Despite the potential for Karak to become the leading restaking protocol, Alon Muroch, CEO of SSV.Labs, warns that the introduction of multi-asset restaking may bring additional risks compared to EigenLayer. Muroch emphasized the importance of considering such risks when evaluating the growth of the restaking market.
In related news, Lido Finance recently achieved a milestone of 1 million validators, contributing to the expansion of the decentralized finance (DeFi) sector.