- BNB Chain has announced plans to introduce restaking, where users can stake their tokens in multiple platforms, increasing their income.
- With its TVL just over $4 billion, BNB needs to reverse the downward trend that has seen the value locked dip 80% from once standing above $20 billion.
BNB Chain is home to one of the world’s biggest DeFi ecosystems, but a recent announcement could give it the much-needed push and allow it to catch up with Solana.
BNB Chain announced on Wednesday that it’s set to introduce restaking soon.
— BNB Chain (@BNBCHAIN) September 11, 2024
Restaking is a practice in which users can use the same tokens staked on one protocol and stake them on another protocol. Essentially, a user gets to earn the yield from multiple platforms, which can lead to much higher returns.
BNB Chain was scant on the details of the restaking program. It’s unclear whether it will have specified restaking protocols within its ecosystem or whether any developer can deploy their own solution. On the Ethereum blockchain, restaking platforms have become one of the hottest trends. The leader is EigenLayer, which allows users to take the ETH they’ve already staked to secure Ethereum and restake it with Actively Validated Services which give them yield.
Despite its rapid rise, restaking is a controversial and divisive topic in crypto. Its proponents argue that it boosts security and decentralization. The founder of EigenLayer, Sreeram Kannan, once likened it to having a hypothetical 100 blockchains secured by a war chest of $100 billion in crypto rather than each blockchain being secured by an isolated $1 billion in staked crypto.
While this is true, it’s also very reductive. For one, restaking heightens risk as the contagion of one player is likely to impact everyone in that restaking chain.
Despite the risks, restaking is taking root. Today, EigenLayer boasts $11 billion in TVL, higher than all other Layer 1s except Ethereum, whose TVL is at $44.6 billion. EigenLayer hit $13 billion in TVL in August. Symbiotic, another leading restaking platform, surpassed $1 billion in TVL last month despite launching just three months earlier.
Clearly, restaking can’t be ignored, and BNB Chain is banking on the new trend of reviving its DeFi sector. While it currently has the fourth-highest TVL in the sector at $4.39 billion, it’s a far cry from the success it was three years ago. In 2021, BNB Chain had over $21 billion in value locked, but it has since dipped significantly, bottoming at $2.6 billion last October. It has since recovered progressively but is still a shadow of its former self.
With restaking, BNB Chain could spark a resurgence in BNB staking and consequently, reignite its DeFi sector.
BNB trades at $546.7, gaining 6.9% in the past day, the highest climb in the top ten cryptos. At $79.656 billion, it has solidified its position as the fourth-largest crypto ahead of Solana.
