Kelp DAO: An Overview
Kelp DAO is a cross-chain staking platform connecting Ethereum and EigenLayer. It enables ETH holders to stake on Ethereum and restake across chains using liquid restaking constructs.
Quick answer
Kelp DAO is a cross-chain staking platform connecting Ethereum and EigenLayer. It enables ETH holders to stake on Ethereum and restake across chains using liquid restaking constructs.
Kelp DAO provides a cross-chain staking service for Ethereum and EigenLayer, focusing on Liquid Restaking Solutions for public blockchains. The team is developing an LRT called rsETH for Ethereum on EigenLayer. The project was co-founded by Amitej Gajjala and Dheeraj Borra.
Overview
Launched in November 2023, Kelp DAO operates as a cross-chain liquidity staking platform for Ethereum and EigenLayer. It supports validation and the security of EigenLayer modules by routing Ethereum validators' withdrawal credentials into EigenPods. This approach allows ETH holders who do not meet the 32 ETH validator minimum to stake on Ethereum and subsequently restake on EigenLayer.
Kelp DAO reduces complexity for users wishing to stake tokens. Instead of restricting staking to a single blockchain, the protocol enables multichain staking by using wrapped tokens that represent assets on other chains, permitting users to stake the same assets across various networks.
The protocol aggregates staked tokens from participants into liquidity pools that DeFi applications across chains can use. Contributors to these pools receive rewards drawn from sources such as trading fees and protocol-level incentives.
On May 22nd, 2024, Kelp DAO announced it had raised 3.5 million in investment. Investors included Bankless Ventures, Hypersphere Ventures, Draper Dragon, DACM, Cypher Capital, GSR, HTX Ventures, and DWF Ventures. Angel backers included Scott Moore, Sam Kazemian, Marc Zeller, Saurabh Sharma, and Amrit Kumar. Kelp initiated fundraising in February and closed the round in March with a fully diluted valuation of $90 million.
KEP Token
Users obtain $KEP tokens via the Kelp decentralized application. Weekly, restakers can claim $
KEP is issued as an ERC-20 token, providing an alternative mechanism that improves restaking capital efficiency and segments different user roles. One identified group is Point Producers, who generate EigenLayer Points and KEP and who may not hold ETH capital for restaking.
Immediate use cases for $KEP include trading on Automated Market Makers (AMMs) and supplying liquidity on Decentralized Exchanges (DEXs). Pairings such as $KEP <> rsETH and $KEP <> USDC enable participants to earn rewards like kelp miles and swap fees.
rsETH
rsETH is a single, liquid restaked token constructed from LSTs that are accepted as collateral on EigenLayer. It provides fractional ownership of staked assets, lowers the barrier to restaking and DeFi participation, and leverages DeFi composability. The design also addresses complications such as complex reward accounting and high gas costs.
Kelp Miles
Kelp Miles supplement EigenLayer restaked points by granting additional incentives to restakers. They are intended to boost restaking rewards and allocate incentives proportionally to each restaker's contribution. Holders of rsETH engaged in DeFi can earn Kelp Miles, EigenLayer points, and extra yields from DeFi activities. Kelp DAO plans to further encourage DeFi interaction by offering boosted Kelp Miles, giving users added benefits for participating in DeFi.
Pendle Finance
Kelp DAO users can utilize rsETH on Pendle, a protocol that tokenizes and facilitates trading of future yield, via four principal positions:
- PT-rsETH: This position represents only the principal at maturity. It requires depositing rsETH into the Pendle protocol for a predetermined duration and yields a fixed return at maturity. Depositors receive PT-rsETH at a discount determined by the exchange rate; upon maturity each PT-rsETH redeems for 1 ETH worth of rsETH as the yield. This position does not accrue EigenLayer points or Kelp Miles and is intended solely to secure a fixed yield. PT-rsETH can be sold at any time prior to maturity.
- YT-rsETH: This position captures the yield of the underlying asset until maturity. Each YT-rsETH entitles the holder to all yield and points produced by 1 ETH worth of rsETH until the pool reaches maturity. YT pricing is market-driven and reflects the market's valuation. For example, if 1 rsETH trades for 10 YT-rsETH, then each YT-rsETH corresponds to Miles and Points equal to 10 ETH worth of rsETH. Market expectations around YT-rsETH can be influenced by factors such as Long Yield APY, EigenLayer points, and Kelp Miles; careful research is recommended.
- LP-rsETH: The LP position is composed of PT-rsETH and SY-rsETH, with the SY component accruing the yield. This configuration offers single-asset exposure that reduces Impermanent Loss (IL). Benefits tied to LP-rsETH include EigenLayer Points, boosted Kelp Miles, staking and restaking yields, the fixed return from PT-rsETH, swap fees, and Pendle Incentives.
- Liquid Lockers: rsETH is supported in Penpie and Equilibria, which serve as two of Pendle’s liquid lockers.
Partnerships
Platform integrations
In addition to Pendle, Kelp DAO has integrations with Uniswap, Curve, and Balancer. Liquidity providers on these platforms can earn 3x Kelp Miles and Eigenlayer Points.
Polyhedra (ZK)
On April 16th, 2024, Kelp DAO entered a partnership with Polyhedra (ZK), a next-generation Web3 infrastructure developer that employs zero-knowledge proofs (ZKP). Under this arrangement, Polyhedra received $300 million in staked ETH to strengthen the security of its protocol.
Laser Digital
Frequently Asked Questions
What is Kelp DAO?
Kelp DAO is a cross-chain staking platform connecting Ethereum and EigenLayer. It enables ETH holders to stake on Ethereum and restake across chains using liquid restaking constructs.
How does Kelp DAO work?
Kelp DAO operates through smart contracts deployed on the Ethereum blockchain. Users interact directly with the protocol via a web interface or wallet integration — no account creation or KYC is required. All operations are settled on-chain and are publicly verifiable.
Is Kelp DAO safe to use?
Kelp DAO has undergone smart contract audits and is among the more established protocols in DeFi. However, all DeFi protocols carry inherent risks including smart contract vulnerabilities, oracle failures, and liquidation risk. Users should only commit funds they can afford to lose and review the protocol's audit reports before participating.
What blockchain is Kelp DAO built on?
Kelp DAO is primarily deployed on Ethereum. Many leading DeFi protocols are also expanding to Layer-2 networks such as Arbitrum, Optimism, and Base to reduce transaction costs and improve throughput.
What are the risks of using Kelp DAO?
Key risks include smart contract exploits, governance attacks, oracle manipulation, liquidity crises, and regulatory uncertainty. DeFi protocols are uninsured — losses from exploits are typically not recoverable. Always review audits and understand the mechanism before depositing funds.
How do I get started with Kelp DAO?
To use Kelp DAO, you need a self-custody wallet (such as MetaMask or Rabby), ETH for gas fees, and the relevant tokens for the action you want to perform. Visit the official protocol interface, connect your wallet, and follow the on-screen steps. Start with a small amount to familiarise yourself with the UX.
What token does Kelp DAO use?
Kelp DAO typically has a native governance token that allows holders to vote on protocol parameters, fee structures, and treasury allocations. Check the protocol's documentation for the current token ticker, total supply, and distribution schedule.
Who created Kelp DAO?
Kelp DAO was founded by a team of blockchain developers and DeFi researchers. The protocol is typically governed by a decentralised autonomous organisation (DAO), meaning ongoing development and parameter changes are decided collectively by token holders rather than a central company.
What is the total value locked (TVL) in Kelp DAO?
Kelp DAO's TVL fluctuates with market conditions and can be tracked in real time on DeFiLlama (defillama.com). TVL measures the total value of assets deposited into the protocol and is a key indicator of user confidence and liquidity depth.
How does Kelp DAO compare to other DeFi protocols?
Kelp DAO is differentiated by its specific mechanism, fee structure, and supported assets. Comparing protocols should include factors such as audited security posture, capital efficiency, governance maturity, cross-chain availability, and historical uptime. DeFiLlama and Dune Analytics provide side-by-side comparative data.