TLDR:
- Kraken has launched Ethereum reset via EigenLayer for customers outside the US
- Reastake allows users to earn additional rewards on already staked ETH
- Staked, a subsidiary of Kraken, will act as a validator for the rescaled ETH
- The total value locked in liquid reset tokens has grown by over 3,000% this year
- EigenLayer’s EIGEN token was recently unlocked for trading at a valuation of $6.7 billion
Kraken, a major cryptocurrency exchange, announced the launch of Ethereum reestablishment through the EigenLayer protocol for your customers outside the US.
This new feature allows users to earn additional rewards on their already staked Ethereum (ETH) by participating in the security of decentralized applications (dApps) built on the EigenLayer network.
Re-establishment is a process that allows users to extend the utility of their staked assets by providing security to various protocols without decoupling them from the original blockchain. This innovative approach allows investors to potentially increase their overall return while contributing to the security of the broader ecosystem.
The introduction of reset on Kraken comes at a time of significant growth in the sector. According to data from DefiLlama, the total value locked in liquid reset tokens has experienced a notable increase of over 3,000% this year, reaching approximately $11 billion. This rapid expansion highlights the growing interest and adoption of reinvestment among cryptocurrency investors.
Kraken’s reset feature aims to simplify the process for its users, making it more accessible to a wider range of customers. Mark Greenberg, global head of asset growth at Kraken, stated that the integration “significantly reduces” barriers to entry for investors, as most crypto users are already familiar with centralized exchanges.
To implement this new offering, Kraken has partnered with its subsidiary Staked, which will serve as a validator for ETH re-pledged through the exchange. Staked is a prominent EigenLayer operator, typically serving institutional clients. This collaboration allows Kraken to leverage Staked’s expertise in the resettlement space.
Users who participate in resettlement through Kraken will have the option to keep their rewards on the exchange or exchange them for fiat currency or other cryptocurrencies. This flexibility provides investors with several options for managing their income.
It’s important to note that while the reset feature is available in many parts of Europe, it is not accessible to customers in the United States and other jurisdictions where “geographic restrictions apply,” according to Kraken.
The launch of Ethereum reestablishment on Kraken coincides with recent developments in the EigenLayer ecosystem. The protocol’s native token, EIGEN, was recently unlocked for trading, almost five months after initial airdrop to early adopters.
The Eigen Foundation announced that the token would be unlocked on September 30, 2024, with major exchanges like Binance listing it for trading in pairs with other cryptocurrencies, including Bitcoin and Tether.
Kraken’s restaking implementation involves using staked ETH to secure multiple decentralized platforms, known as Actively Validated Services (AVSs).
By providing security to these dApps, users become eligible for additional rewards beyond their standard ETH staking rewards. These rewards are typically paid in AVS tokens, which represent the dApps that the re-secured ETH helps secure.
Reinstatement comes with some additional considerations. EigenLayer implements a minimum 7-day escrow period in addition to the decoupling period required to withdraw assets from the Ethereum network. This means that accessing resecured ETH may take longer compared to standard staking on Ethereum.
To participate in EigenLayer reestablishment through Kraken, users need a verified Kraken Pro account at mid-tier or higher, ETH in their spot or staked balance, and residency outside of prohibited geographies. like the United States.
