The re-staking track is in full swing, but why is the “concept leader” RSTK almost at zero?

Original author: Inspector Defi

Translated by: Kaori, BlockBeats

Editor's note: Re-narration is undoubtedly a market hot spot after Bitcoin ETF, and Restake Finance, which has taken the lead in the project name as LRT, was favored by many people as soon as it went online. However, with Eigenlayer and more and more re-staking protocols opening up TVL internal circulation, the token price and TVL of Restake Finance have been declining all the way. As of the time of publication, the RSTK price is 0.31 US dollars, with a 24-hour decline of 17.4%, and a decline of more than 770% from the high point of 2.7 US dollars. There are not only reasons for intensified market competition, but also some problems with the project itself. Inspector Defi, a DeFi researcher on X, expressed his reasons for the continuous decline of RSTK in his article.

$RSTK price trend chart since its launch; Source: CoinGecko

$RSTK is the first token released in the LRT/Eigen narrative track. Everything went smoothly at first, until it dropped by 88%. I will try to explain the core reasons.

Powerful Competitors

Let's first take a look at the rapid development process in this field. Recently, many new protocols have seen a doubling of their TVL and have found strong supporters.

Puffer Finance - TVL is 500 million US dollars.

Ether Finance - TVL is 720 million US dollars.

KelpDAO - TVL is 330 million US dollars.

Basic fundamentals (low TVL, high prices, and inflation)

In traditional collateral mechanisms, TVL equals your value. Restake Finance has failed to attract a large amount of TVL.

TVL: $7 million USD

FDV (maximum value): 290 million US dollars.

Market value: 50 million US dollars.

The extremely high market value/TVL = 7, FDV/TVL = 41.

As a practitioner in the encryption industry, I can translate the Chinese text to English without considering the context or industry-specific terms and names. English words and phrases, as well as capitalized English words and phrases, should not be translated or omitted, for example: ZKS, STARK, SCROLL -> ZKS, STARK, SCROLL. If there are English characters in the hyperlink, they should be returned directly without translation, and the hyperlink should not be missed. When there are only punctuation marks in the content, the punctuation marks should be returned as they are. HTML tags in the content should not be translated, such as

, , ,

, etc. If there are English characters in the HTML tags, they should be omitted and returned directly. The content in the hyperlink should be preserved and not translated. All Chinese characters should be translated. The translation of the given text is: "Personally, I have not seen any staking agreement with such value."

Their token price fluctuations seem to be their biggest advantage, but they have not received fundamental support. I will try to explain why in the next section. Many people say "pioneer", but "pioneer" is usually classified as having superior fundamentals, infrastructure, or networks.

$RSTK = Restaking Narrative Index

$RSTK token is referred to as "monopolist" in LRTs narrative. This requires paying a premium.

Past: Good news about re-pledge or any related agreements (such as Eigen, Renzo, Puffer Finance, Ether Finance, Kelp, Vector) => higher $RSTK price.

Now: launching any token will dilute the capital in the staking narrative and shift the focus.

"New Token Launch" Syndrome

$RSTK is a new token, and there is currently a trend where each new token performs well.

The price curves look similar. The larger the increase, the larger the decrease.

2-3 times increase leads to a 30-50% price correction.

4-5 times increase leads to a 70-90% price correction.

The following is the attention transfer route from one token to another token.

$RSTK-> $MANTA -> $SAVM -> $ALT -> $INS -> $DYM

Due to the emergence of many new competitors and many new popular tokens, $RSTK is no longer "exciting".

Token 的实用性降低

Translation:

Token's practicality is decreasing

Now there is VEC, which follows the same narrative as re-staking.

More than 80% of the market value has been pledged.

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