Karak — now valued at $1bn — challenges EigenLayer in restaking sector

DL News reports that restaking protocol Karak has quickly emerged as a significant challenger to EigenLayer, attracting hundreds of millions of dollars in deposits and securing a valuation of about $1 billion in a funding round backing its developer, Andalusia Labs. The protocol launched privately in April and has drawn roughly $400 million in user deposits, largely driven by so‑called “airdrop farmers” targeting tokenless DeFi projects that offer points schemes rather than explicit token commitments. Karak runs an XP points programme that rewards users for depositing assets and referrals, feeding market expectations that these points may later convert into a token distribution, even though the team has not formally promised an airdrop. Karak’s rise comes amid a wider boom in Ethereum restaking, a sector dominated by EigenLayer, which has accumulated more than $12 billion in restaked assets but has been cautious about confirming any future token airdrop. The competition between EigenLayer and newer entrants like Karak reflects both the demand for additional yield on staked assets and the speculative “points” meta in DeFi, where users chase early participation in tokenless protocols in hope of future rewards. At the same time, Andalusia Labs and Karak face controversy over historic Terra-linked funds: critics from the Terra Classic community allege that about 200 million USTC (worth around $6–7 million at the time) originating from the Terra community pool were improperly handled after Terra’s collapse, while Karak’s team maintains the funds were part of a grant to its previous project Risk Harbor, that no user assets were misappropriated, and that the remaining funds are earmarked for a protection fund for initial restaking pools. The combination of rapid growth, a high valuation, and unresolved questions around past grant funds makes Karak a focal point in the evolving restaking landscape and in the debate over points-based user acquisition in DeFi.

✨ AI-generated background, compiled from web sources — not editorial content.

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