Kraken deposits 5.06 ETH to Eigencloud as EIGEN slumps

On May 26, Kraken deposited 5.06 ETH into Eigencloud. The transfer was recorded on the Ethereum network and contributes to on-chain data showing continued institutional use of restaking services.

Restaking lets ether that is already staked to secure Ethereum be reused as economic backing for other applications. Eigencloud, formerly known as Eigenlayer, launched restaking in 2023 and allows actively validated services to rely on Ethereum’s validator security instead of building independent validator sets.

Eigencloud holds about $6.53 billion in total value locked. Its native token, EIGEN, trades near $0.25, roughly 96% below its $5.65 all-time high.

On an annualized basis the protocol distributes $56.77 million in incentives to stakers and operators and generates about $13.6 million in fees, producing an annualized earnings shortfall of roughly $12.7 million.

Eigencloud has raised about $220 million in funding, including a $50 million Series A that involved a16z crypto. The broader restaking market is estimated at about $11.3 billion, with Eigencloud holding around $6.6 billion of that total.

Kraken is a U.S.-based cryptocurrency exchange that offers staking and custodial services. Large exchanges commonly make deposits on behalf of clients seeking yield on ether holdings, and the 5.06 ETH deposit is consistent with custodial use of restaking to pursue additional returns on staked ether.

Market participants continue to monitor on-chain deposits, fee revenue from actively validated services and protocol emissions policies as indicators of how restaking economics are developing.