Ethereum staking protocol EigenLayer has surpassed lending protocol Aave in terms of total value locked (TVL), with $10.4 billion worth of crypto committed to the protocol. This comes after EigenLayer temporarily removed the cap on how much users could stake, resulting in a surge in TVL. 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 seen a slight decrease in TVL, with EigenLayer currently at $10.4 billion and Aave at $10.35 billion.
EigenLayer started the year with a TVL of $1.1 billion and has experienced a staggering 844.6% year-to-date growth, according to DefiLlama. Restaking protocols like EigenLayer and its competitor, the Octopus Network, enable users to restake their already staking-derived tokens, such as Lido Staked ETH (stETH), which is provided to those staking Ether (ETH) on Lido. This practice has sparked controversy, with some Ethereum developers expressing concerns about excessive leverage, while others argue that it offers additional rewards to those who have already staked their ETH.
EigenLayer’s TVL began to rise on February 5 after removing its staking cap temporarily to encourage further growth. Since then, it has experienced a 382.5% increase in TVL. The protocol’s flip of Aave prompted Solana Foundation strategy head Austin Federa to question how restaking TVL is calculated. In a March 5 post, Federa stated that he does not believe staking-derived assets like stETH should be counted as TVL since their value is technically locked on another protocol.
Data from Dune Analytics reveals that EigenLayer has over 115,000 unique depositors, with DefiLlama stats showing that 74% of staked tokens are Wrapped Ether (wETH) and stETH. As for Aave, Token Terminal data indicates that it has over 5,700 daily active users compared to Lido’s less than 430.
Aave has faced challenges recently, as its long-time risk manager Gauntlet left the platform on February 21 due to difficulties navigating “inconsistent guidelines and unwritten objectives of the largest stakeholders.” Gauntlet’s departure came two months after signing a $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, represent the largest category in DeFi protocols, with nearly $55 billion in locked value across approximately 160 protocols. This category is mainly bolstered by Lido, the largest protocol with $35 billion in locked value. Restaking, with only two protocols, is the sixth-largest category, trailing behind the 125 projects that use collateralized lending to mint stablecoins.