Taking KelpDAO as an example, how can LRT projects unlock their second growth curve?
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Taking KelpDAO as an example, how can LRT projects unlock their second growth curve?
LRT is in a quiet pre-bull phase, with potential yet to be unleashed.
Navigating Web3 tides with focused insightsAuthor: NingNing
Since June, the TVL in the LRT sector has seen negative growth, declining from its ATH of 3.8843 million ETH to the current 3.5508 million ETH. Key metrics such as deposit addresses, daily deposit volume, and social media discussion热度 have also declined simultaneously.
The reasons behind this phenomenon are as follows:
As is well known, LRT returns—often described as "one fish eaten three ways"—consist of three components: ETH staking yield, EigenLayer points airdrop rewards, and LRT project-specific points airdrops.
With tokens like Ether.fi and Renzo being fully priced on CEXs, and EigenLayer also achieving pricing in pre-market trading, the market's previously over-optimistic expectations regarding LRT returns have been corrected. Investors are now recognizing that LRT staking is essentially a fixed-income, token-denominated investment.
The Pendle YT market has priced LRT-wrapped ETH assets at a yield range of just 6%–7%. Currently, Renzo’s rsETH offers the highest YT yield, but only at 7.1%. At these yield levels, it has become difficult to attract ETH holders and airdrop farmers to stake or restake their ETH given the risk of principal loss.
Given this situation, how can LRT break through and initiate a second wave of growth? Currently, there are three potential directions:
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Continue points farming initiatives—for example, Ether.fi and Renzo launching Season 3 (S3) points campaigns. However, due to low, calculable APYs, market response has been lukewarm, with no significant increase in TVL.
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Leverage new narratives to expand market expectations for returns. Puffer recently launched infrastructure projects tied to the emerging "Based Rollup" narrative, boosting market anticipation for potential airdrop rewards, enabling it to achieve counter-cyclical TVL growth during an otherwise sluggish period for the sector.
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Actively and deeply engage with AVS (Actively Validated Services), adding an additional "fish" (i.e., AVS project airdrop rewards). KelpDAO and Renzo are leading in this regard. This strategy is long-term oriented, betting on the next bull cycle and the anticipated wave of asset issuance in the coming years. Currently, there are 16 AVS projects within the EigenLayer ecosystem, spanning ZK coprocessors, AI+DePIN, chain abstraction, Web3 gaming, and social applications.
Additionally, KelpDAO is partnering with emerging projects on joint points farming initiatives to enhance yields, while also expanding multi-chain support and improving liquidity for its restaked asset rsETH.
Overall, the LRT sector is currently in a quiet, pre-bull phase—holding back without yet unleashing momentum. A certain degree of data decline during this stage is normal. We should take a long-term view, embrace long-termism, and patiently await market validation of the AVS paradigm shift.
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