Ethereum staking protocol EigenLayer has surpassed lending protocol Aave in terms of total value locked (TVL), with $10.4 billion worth of cryptocurrency committed to the protocol. This comes after EigenLayer temporarily removed the cap on how much users could stake. On March 5, EigenLayer reached an all-time high TVL of $11 billion, surpassing Aave’s 21-month high of $10.7 billion TVL. According to DefiLlama data, EigenLayer is now the second-largest decentralized finance (DeFi) protocol by TVL, behind staking giant Lido.
Both EigenLayer and Aave have experienced a slight decrease in TVL, with EigenLayer currently standing at $10.4 billion and Aave at $10.35 billion. EigenLayer started 2024 with a TVL of $1.1 billion and has seen an impressive year-to-date growth of 844.6%, according to DefiLlama.
EigenLayer and its smaller rival, the Octopus Network, allow users to restake their already staking-derived tokens, such as Lido Staked ETH (stETH). This practice has sparked controversy, with some Ethereum developers warning about the creation of excessive leverage. However, proponents argue that it can provide additional rewards to those who have already staked their ETH.
EigenLayer’s TVL began to rise on February 5, after temporarily removing its staking cap to encourage further growth. Since then, it has experienced a 382.5% increase in TVL. Solana Foundation strategy head Austin Federa questioned the way restaking TVL is calculated in a March 5 post, stating that he doesn’t believe staking-derived assets like stETH should be counted, as their value is technically locked on another protocol.
According to Dune Analytics data, EigenLayer has over 115,000 unique depositors, with 74% of staked tokens being Wrapped Ether (wETH) and stETH. On the other hand, Aave has over 5,700 daily active users, while Lido has less than 430, according to Token Terminal data.
Aave has faced challenges recently, as its long-time risk manager Gauntlet left the protocol on February 21, citing difficulties in navigating inconsistent guidelines and unwritten objectives of the largest stakeholders. Gauntlet’s departure came two months after signing a one-year, $1.6 million contract with Aave. Shortly after, on February 28, Gauntlet partnered with rival DeFi lending protocol Morpho.
Liquid staking protocols, where users receive a token 1:1 for their staked funds, make up the largest category of DeFi protocols, with nearly $55 billion in locked value across approximately 160 protocols. This is mainly driven by Lido, the largest protocol with a locked value of $35 billion. Restaking, with only two protocols, is the sixth-largest category, trailing behind the 125 projects that use collateralized lending to mint stablecoins.