MEV Capital says liquid staking offers market-neutral ETH yields.<\/p>\n
Liquid restaking is not just for degens. Institutional investors are also getting in on the trade.<\/p>\n
Gytis Trilikauskis, COO of MEV Capital, said his fund initially focused on liquidity provision, arbitrage, and MEV-based strategies, but has recently pivoted to capitalize on the booming liquid restaking token (LRT) sector.<\/p>\n
Trilikauskis noted that MEV Capital wasn\u2019t interested in restaking until Liquid Restaking Tokens (LRTs) gave rise to new opportunities for yield generation through DeFi composability, noting that his clients expect \u201cat least a double-digit yield.\u201d<\/p>\n
Professional investors are seeking to take advantage of the yield that\u2019s generated from liquid restaking, plus the potential airdrops many of these applications are expected to do, said Trilikauskis. It\u2019s a sign institutions are weighing that the yield from one of the fastest growing sectors in crypto is worth the potential risk that comes from taking multiple layers of protocol and smart contracts risks.<\/p>\n
<\/p>\n
MEV Capital, which launched in late 2020, mobilizes $160 million in assets under management on behalf of institutional clients including crypto funds, high-net-worth individuals, DAOs, and other web3 projects commanding sizable treasuries.<\/p>\n
\u201cWhat we focus on is generating more Ethereum for our clients\u2026 We just want to preserve the principle that the clients are giving us and then we want to generate them some yield.\u201d<\/p>\n
EigenLayer<\/a>, the pioneering restaking protocol, allows users to earn additional yields on top Ethereum staking rewards by also securing third-party Actively Validated Services (AVSs) at the same time EigenLayer users can either deposit liquid staking tokens (LSTs) into its capped pools or provide natively staked Ether without limit.<\/p>\n Liquid restaking builds on this by offering users exposure to native restaking, with depositors receiving tokens representing their restaked position. Said LRTs can then be used in DeFi protocols to generate even more yield, or traded to bypass restaking withdrawal delays. Deposits also earn \u201c points<\/a>\u201d \u2014 which are expected to qualify holders for future airdrops from EigenLayer and LRT providers in the future.<\/p>\n Trilikauskis noted that MEV Capital isn\u2019t viewing the tokens earned through points campaigns as a long-term hodl.<\/p>\n \u201cI think that we are going to liquidate significant size for sure,\u201d he said. \u201cWe are not taking on market risk with these tokens that we farm or get dropped.\u201d<\/p>\n <\/p>\n Start for free<\/a><\/div>\n <\/p>\n However, Trilikauskis added that the firm will communicate with its clients to establish a \u201cmiddle path\u201d should individual clients wish to maintain exposure to native tokens airdropped by either EigenLayer or LRT providers in the future.<\/p>\n Trilikauskis estimates MEV Capital is among the top 10 most-active liquid restakers on the three largest LST protocols\u00a0\u2014<\/em>\u00a0 EtherFi<\/a>, Kelp DAO, and\u00a0 Renzo Finance,<\/a>\u00a0in addition to holding some smaller positions on\u00a0 Puffer Finance<\/a>. He noted that the firm is not interested in using every possible LRT protocol, acknowledging that many DeFi protocols can expose users to significant risk.<\/p>\n \u201cWe try to focus on what we think are going to be the industry leaders,\u201d Trilikauskis said.<\/p>\n Trilikauskis said MEV Capital is actively providing liquidity for LRTs on decentralized exchanges in addition to using Pendle, a yield tokenization platform. The team is also exploring yield optimization protocols built on top of both DEXes and Pendle to generate additional returns<\/p>\n \u201cRight now, since there’s a lot of hype, and there’s a lot of narrative forming around [LRTs], protocols are actively pushing integrations that would allow you to put those LRTs in DeFi,\u201d Trilikauskis said. \u201cIt’s getting to the point where you can say you can really see DeFi\u2019s composability at its best, and where it can lead.\u201d While Trilikauskis acknowledged the risks associated with restaking, he noted that several projects are working to mitigate the exacerbated slashing risks associated with EigenLayer should third-party AVSs misbehave.<\/p>\n \u201cYou’ll be able to preemptively withdraw your stake if these protocols start doing some nasty shit that is not confined within the ruleset,\u201d he said. \u201cOf course, there’s a lot of risk, but you can see how these protocols can stack on one another.\u201d<\/p>\n Looking ahead, Trilikauskis said MEV Capital will closely monitor the growth of EigenLayer\u2019s AVS ecosystem for opportunity, but will also be willing to exit the sector should delta-neutral strategies no longer present themselves.<\/p>\n \u201cIt might still be interesting to [continue restaking on EigenLayer] and keep our LRT exposure,\u201d he said. \u201cBut if there’s going to be more opportunities on liquid staking derivatives or ETH-based assets that are not related to EigenLayer, we will go where the opportunity is\u2026 Once EigenLayer launches, once the cat is out of the bag, then we’ll need to see how the cat looks. That’s always the case with asset management, you try to find the best risk-adjusted opportunity and go there. At this moment, it looks like EigenLayer is a clear winner.\u201d<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":" MEV Capital says liquid staking offers market-neutral ETH yields. Liquid restaking is not just for degens. Institutional investors are also getting in on the trade. Gytis Trilikauskis, COO of MEV Capital, said his fund initially focused on liquidity provision, arbitrage, and MEV-based strategies, but has recently pivoted to capitalize on the booming liquid restaking token […]<\/p>\n","protected":false},"author":2,"featured_media":257947,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[274,273,272,244,266,271,268,270,269,267],"class_list":["post-257946","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-de-fi","tag-crypto-finance","tag-decentralized-finance","tag-liquidity","tag-metamask","tag-pancake","tag-slippage","tag-sushiswap","tag-tronlink","tag-trust-wallet","tag-uniswap"],"_links":{"self":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/257946","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/comments?post=257946"}],"version-history":[{"count":2,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/257946\/revisions"}],"predecessor-version":[{"id":257949,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/257946\/revisions\/257949"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media\/257947"}],"wp:attachment":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media?parent=257946"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/categories?post=257946"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/tags?post=257946"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
Looking beyond LRTs<\/h2>\n