UPDATED: February 29, 2024, 11:23 a.m. EST
Liquid dining protocol Kelp has opened claims for the KEP token, allowing users to access a tokenized version of EigenLayer reward points.
So far, Kelp owns 156 million KEP tokens, of which 10 million have been claimed by users. Kelp Data watch. This gives these tokens a diluted market cap of $21 million at the price of $0.14 per token.
This development comes against the backdrop of growing interest in liquidity restocking, where the total value locked across major platforms has exceeded $4 billion. Kelp itself has secured total deposits of over 600 million dollars.
Understanding re-staking and liquid re-staking
EigenLayer’s strategy is to leverage the economic security of ETH by accepting native ETH – which can be directly reinvested by Ethereum validators – and liquid-staking ETH, or liquid staking protocols. This can then be used to secure other protocols, although this feature has not yet gone live. This is called recovery.
Meanwhile, the idea behind liquid reinvestment offered by Kelp (and others like EtherFi and Renzo) is that it allows ETH holders – holding native tokens or sometimes LST – to invest and reinvest on Eigen without losing access to the underlying capital. (Hence the term “liquid.”)
EigenLayer users earn points for their ether deposits, which would increase their chances of receiving a token from EigenLayer. Liquid restaking users keep their liquid capital while keeping their own points.
Kelp converted these points into tokens, opening up its separate on-chain marketplace and a whole new cryptocurrency niche. There are other ways to redeem points, like Whales Market and Pendle, but they haven’t converted points to tokens yet.
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