How InceptionLRT Addresses EigenLayer Limitations

February 23, 2024
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EigenLayer has risen to become the fifth largest protocol in terms of total value locked (TVL), showcasing its growing influence. Despite this success, there are inherent limitations within the restaking framework that InceptionLRT seeks to overcome. By incorporating iLRTs into its platform, InceptionLRT enhances the user experience for those looking to engage with the ecosystem. This move is aimed at improving capital efficiency and asset composability, offering a more seamless and effective way for users to optimize their investments.

TL;DR:

  • EigenLayer is slowly establishing its place among Ethereum’s top protocols.
  • While the restaking ecosystem appears set for success, it faces notable challenges, including limited DeFi composability, liquidity lock-up, strong competition from ETH LSTs in yield farming opportunities, and protracted unstaking times.
  • Introducing its isolated liquid restaking tokens (iLRTs) enables users to be part of the restaking ecosystem while remaining capital-efficient.
  • iLRTs contribute to safer investments by minimizing the risks associated with basket-based LRTs and promote transparency by simplifying how users monitor their positions and the system's integrity.
  • The InceptionLRT platform is already live on the mainnet allowing users to restake their LSTs and receive their iLRT in exchange.

EigenLayer and Restaking Limitations

EigenLayer is slowly establishing its place among Ethereum’s top protocols. Even though EigenLayer has only allowed restaking during three brief periods in the last six months, it already reached the $5 billion total value locked (TVL) mark, which puts it as the 4th largest protocol in Ethereum rankings, and 5th on all chain rankings.

EigenLayer_TVL.png EigenLayer Restaking TVL (Source: Link)

What makes this achievement even more notable is that EigenLayer has reached this position without having launched its full product lineup. Currently, it is only on its second stage testnet, where the first actively validated service (AVS), EigenDA, is being tested.

While the restaking ecosystem appears set for success, it faces notable challenges, including limited DeFi composability, liquidity lock-up, strong competition from ETH LSTs in yield farming opportunities, and protracted unstaking times. These limitations mirror the obstacles encountered during the initial launch of Ethereum staking, which significantly hindered adoption until the liquid staking sector emerged to address these issues.

In response to the challenges faced by the EigenLayer ecosystem, InceptionLRT introduces a liquid restaking protocol designed to overcome most of these limitations. It aims to enhance the user experience and encourage broader participation by tackling the specific issues that have impeded the ecosystem's growth.

InceptionLRT: Isolated Liquid Restaking Solution

As a liquid restaking protocol, InceptionLRT enables users to participate in the EigenLayer ecosystem while avoiding most of the framework’s bottlenecks. Introducing its isolated liquid restaking tokens (iLRTs) enables users to be part of the restaking ecosystem while remaining capital-efficient. Thus, significantly increasing the liquidity and flexibility of restaked assets, making participation in the ecosystem more accessible and appealing. With their iLRTs users will be able to accrue a larger yield by using a variety of yield farming techniques that increase their assets' composability.

Moreover, iLRTs contribute to safer investments by minimizing the risks associated with basket-based LRTs and promote transparency by simplifying how users monitor their investments and the system's integrity.

Regarding InceptionLRT fees and reward structure, it is designed to gather incentives from multiple sources, enhancing their value over time. Holders can receive diverse rewards in ETH, USDC, and AVS tokens, with the value of instETH/inrETH expected to increase. To support the ecosystem's sustainability and reward node operators for their contributions, InceptionLRT implements a fee policy on these rewards.

Inception_banner.png InceptionLRT 11 Onboarded LSTs (Source: https://www.inceptionlrt.com/blog/integration-of-11-lsts-inceptionlrt/)

Looking ahead: InceptionsLRT’s Impact

InceptionLRT is poised to transform the restaking landscape with its unique offerings. The company recognizes the highly competitive nature of the liquid restaking market and aims to set itself apart from competitors. It plans to do this by providing not only safer LRT products but also a more efficient liquidity management solution.

Understanding the critical importance of time in the market sector, InceptionLRT emphasizes the need for users to quickly grasp their financial positions. To address this, the platform includes a comprehensive portfolio management tool. This feature allows users to respond rapidly to any changes in the market, ensuring they can make informed decisions swiftly and efficiently.

The InceptionLRT platform is already on the mainnet allowing users to restake their LSTs and receive their iLRT in exchange! We invite everyone to test the platform and start accruing EigenLayer Points and Inception Totems which at its time promise to reward your early participation in the protocol.

Inception_Restaking_dashboard.png InceptionLRT Liquid Restaking Dashboard (Source: https://www.inceptionlrt.com/app/)

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