5 Ethereum-Aligned Protocols to Watch in 2024
Stake your $ETH, roll it up and watch it multiply - if the cryptoverse's favorite layer two solutions and staking plays have anything to say about it. From Optimism's skyrocketing gains to the dominance of Lido's stETH, let's break down 5 of the hottest investments aligned with Ethereum's scaling and growth.
Read on to find out how you can leverage protocols like Arbitrum, Eigen Layer and Gelato to supercharge your ETH exposure. But be warned - these potent plays aren't for the faint of heart. So strap in as we dive deep into the high-octane opportunities at the cutting edge of Ethereum's layer two revolution.
Optimism ($OP) - Optimism is an Ethereum Layer 2 scaling solution. Optimism has seen the highest gains of any Ethereum L2 over the past 3 months, with its token OP and total value locked both increasing by over 200% and 47% respectively. If you like data, check out this Dune Analytics dashboard for the protocol.
https://dune.com/optimismfnd/Optimism
Optimism will benefit from lower gas fees after the Ethereum Dencun upgrade in March. It has also seen significant adoption of its OP Stack codebase by other projects. chose to launch it's Layer 2 protocol Base on the OP stack. I will be writing a detailed analysis of the Optimism protocol based on my ongoing experience of living and working on the chain. So keep an eye out for that coming soon.
Arbitrum (ARB) - Like Optimism, Arbitrum is an Ethereum Layer 2 and will see lower gas fees after the Dencun upgrade. While Optimism saw slightly higher token gains, Arbitrum saw a greater increase in total value locked at 48%.
https://l2beat.com/scaling/projects/arbitrum
Arbitrum is also seeing capital inflows outpacing other L2s. Its Orbit L3 solutions are also gaining traction. I wrote a detailed analysis of the protocol recently so if you want some more info about the project check it out
Lido ($LDO) - Lido is the dominant staking provider for Ethereum. Its token LDO will benefit from growth in Ethereum staking. Lido's plans to improve decentralization through a dual governance model and an upcoming staking router. LDO provides exposure to growth in even for decentralization-focused investors.
https://lido.fi/ethereum
If you want to prioritise decentralization and diversification in your staked $ETH investments make sure to take a good look at RocketPool ($RPL) too. Neither Lido nor RocketPool have seen breakout growth in terms of their respective governance tokens yet, however the fundamentals behind liquid staking on Ethereum are very strong and as more institutional investors begin to migrate their assets into the Ethereum ecosystem, the internet bond narrative will only become more attractive.
EigenLayer- While it has no token yet, depositing into EigenLayer's restaking contract positions investors for an airdrop when its token launches later this year. Restaking with EigenLayer will allow stakers to earn yield while their ETH secures other crypto applications in the future.
There is already more the half a billion dollars worth of staked $ETH restaked into the protocol. It's remarkable how popular it is.
https://dune.com/cryptoded/eigenlayer
I've already written an article on Celestia ($TIA), which is also competing in the Data Availability space with EigenLayer. I'm waiting for the Eigenlayer Token Generation Event (TGE) to happen before I write a more thorough essay on the project. So keep an eye out for that.
Gelato (GEL) - Gelato is a rollup-as-a-service provider, recently deploying an Optimism rollup for Lisk Network. As more applications utilize rollups, Gelato is well positioned to provide these services and its GEL token could appreciate. Gelato allows developers to deploy their smart contracts and applications to various rollup frameworks like Optimism and Arbitrum using their platform.
https://www.gelato.network/raas-marketplace
If you are planning on building anything in the Ethereum dApp eco-system, Gelato probably has something you'll find useful.
I became aware of Gelato a few years ago when I was exploring ways to create an on-chain trading bot similar to what 3commas.io offers for centralized exchange trading. I am very impressed with how the project has expanded and evolved over time and I think there are great things ahead for them.
Optimism, Arbitrum, Lido, EigenLayer and Gelato present compelling investment opportunities aligned with Ethereum's scaling and growth. As Layer 2 solutions see greater adoption and lower gas fees, and staking on Ethereum continues to expand, these protocols are well positioned to benefit.
By leveraging these projects, investors can gain exposure to Ethereum's progress while also benefiting from the growth of important supporting technologies and services powering its ecosystem.
With Ethereum emerging as the dominant programmable blockchain, these five investments provide promising ways to stake a claim in its increasingly layered and decentralized future.
It's important to note that this article discusses investment opportunities and should not be considered financial advice. Cryptocurrency markets are highly volatile and risky. You should thoroughly research any investments on your own before making any decisions. Do your own due diligence and only invest amounts you can afford to lose.
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