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Lybra Finance is accused of "inaction" as Restaking gains popularity and takes away a significant amount of funds.

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As of February 5th, Lybra Finance's TVL dropped from approximately $260 million to $76 million in the past week, a decrease of 69.7%.

Original Title: "Restaking hot narrative takes away large amounts of funds, Lybra Finance accused of 'doing nothing' by the community"

Original Author: Nancy, PANews

As the leader of the LSDFi track, Lybra Finance is currently facing the embarrassing situation of a sharp drop in TVL and coin price. At the same time, Lybra Finance is also facing the market impact of the popular Restaking project.

The total value locked (TVL) of Lybra Finance has recently experienced a cliff-like decline. According to DeFiLlama data, as of February 5th, Lybra Finance's TVL has dropped from about $260 million to $76 million in the past week, a decrease of 69.7%. At the same time, the price of Lybra Finance's token, LBR, has also experienced a flash crash. According to CoinGecko data, in the past 7 days, the LBR price has dropped by about 51%.

On-chain data analysis platform Spot On Chain monitoring shows that a large part of the TVL of the LBR project is contributed by a group of KOLs and anonymous addresses. These staunch supporters seem to have recently withdrawn part of their staked tokens and sold all of their LBR tokens. Three noteworthy examples include blurr.eth, the top staker in LBR (who previously staked over 34,000 ETH, equivalent to $70 million), who has sold all of their tokens, with the last action taken on January 15, 2024; sifuvision.eth, a top 5 staker with over 6,000 ETH staked (equivalent to $13 million), who has sold all of their tokens; and czsamsunsb.eth (who previously staked 4,000 ETH, equivalent to $8 million) has also sold all of their tokens.

Due to the selling behavior of large holders, Lybra Finance's interest-bearing stablecoin eUSD once fell to 0.88 USDT, but the price of eUSD has been "underwater" since November last year.

The sharp drop in Lybra Finance data may be related to the popularity of the Restaking track. In fact, recently, the Restaking narrative has been dominant, and the various ingenious point battles have been dazzling. The endless new protocols have made investors exclaim "not enough ETH in hand".

For example, after the Ethereum re-staking protocol EigenLayer reopened its staking window and temporarily lifted the 200,000 ETH staking limit, its TVL skyrocketed in just a few hours. According to DefiLlama's data, after Eigenlayer lifted the deposit limit, its cumulative TVL has exceeded $3.21 billion; LSD protocol Puffer Finance broke through $450 million in just a few days after allowing token staking for reward points and announcing investment from Binance Labs. In addition, projects such as ether.fi, Kelp DAO, Renzo, and Eigenpie have also attracted a lot of investment.

Regarding the recent market performance, Lybra Finance stated on X platform that it has noticed a sudden drop in TVL, which is caused by user behavior. The protocol is secure and user assets are not affected. However, the official "neglectful" attitude has also caused dissatisfaction among the community, who believe that the official has not provided effective solutions and has been criticized for "doing nothing". Not only has the product failed to keep up with the pace of market development, but it has also failed to disclose future product plans to the community in a timely manner.

And the community's protests are not without reason. Since the release of version 2, Lybra Finance has not made significant market moves. In contrast, facing the market trend of Restaking/LRTFi, such as Pendle, which is also in the LSDFi track, officially entered the Restaking field by launching the eETH liquidity staking token on ether.fi, providing users with more income and points opportunities, as well as additional income such as swap fees and incentives to compete with other projects. Maverick Protocol has also successively launched the mesLBR liquidity staking token on the income aggregator Match Finance and the wstETH of the Ethereum liquidity staking protocol Lido, providing users with equity such as points.

In short, for Lybra Finance, if they continue to ignore community demands and make no changes, they will face further risks of losing funds and community trust.