Restaking protocol EigenLayer flips Aave with $10.4B total value locked

    06 Mar 2024

    Ethereum staking protocol EigenLayer has shot past lending protocol Aave in its total value locked (TVL), with $10.4 billion worth of crypto committed to the protocol after temporarily removing a cap on how much users could stake.

    On March 5, EigenLayer hit an all-time high TVL of $11 billion, surpassing Aave’s 21-month high $10.7 billion TVL and becoming the second-largest decentralized finance (DeFi) protocol by TVL behind staking giant Lido, according to DefiLlama data.

    Both TVLs have now dropped slightly, with EigenLayer at $10.4 billion and Aave at $10.35 billion.

    Restaking protocols such as EigenLayer and its smaller rival, the Octopus Network, allow users to restake their already staking-derived tokens such as Lido Staked ETH (stETH) — which is provided to those staking Ether on Lido.

    The practice has caused controversy, with some Ethereum developers warning it creates too much leverage while proponents say it can hand out extra rewards to those who have already staked their ETH.

    EigenLayer’s TVL started to climb on Feb. 5 after it temporarily removed its staking cap to help spur further growth and has since seen a 382.5% increase in TVL.

    The protocol’s flip of Aave saw Solana Foundation strategy head Austin Federa challenge how restaking TVL is counted in a March 5 X post, saying he doesn’t think staking-derived assets like stETH should be counted as their value is technically locked on another protocol.

    “I don’t think restaking (or liquid staking) should be counted as TVL if we’re not going to count staked native assets as TVL,” Federa wrote.

    Dune Analytics data shows EigenLayer has over 115,000 unique depositors with DefiLlama stats showing 74% of staked tokens are Wrapped Ether (wETH) and stETH.

    Aave, meanwhile, has over 5,700 daily active users while Lido has under 430, according to Token Terminal data.

    Aave has also faced headwinds over the past two weeks as its long-time risk manager Gauntlet left it on Feb. 21 over claimed difficulties navigating “inconsistent guidelines and unwritten objectives of the largest stakeholders.”

    Gauntlet’s split came two months after it signed a one-year, $1.6 million contract with Aave. Days later, on Feb. 28, it partnered with rival DeFi lending protocol Morpho.

    Liquid staking protocols, where users receive a token 1:1 for their staked funds, are the largest DeFi protocol category with nearly $55 billion in locked value across about 160 protocols — buoyed mainly by Lido, the largest protocol by locked value at $35 billion.

    Restaking, with just two protocols, is the sixth-largest category behind the 125 projects that use collateralized lending to mint stablecoins.


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