Re-protocol EigenLayer Flips Aave is locked in a total value of $10.4B
Ethereum staking protocol EigenLayer has overtaken lending protocol Aave in total value locked (TVL), after the $10.4 billion worth of crypto committed to the protocol temporarily removed how many stakes users could hold.
On March 5, EigenLayer hit an all-time high TVL of $11 billion, surpassing Aven's 21-month high of $10.7 billion TVL and becoming the second largest decentralized finance (DeFi) protocol by TVL behind giant Lido.
Both TVLs are now down slightly, EigenLayer at $10.4 billion and Ave at $10.35 billion.
Reinventing protocols like EigenLayer and its smaller rival, the Octopus Network, will allow users to take their already-staked tokens, such as Lido Staked ETH (stETH) — which gives Ether (ETH) to people who stake them on Lido.
The move has sparked controversy, with some Ethereum developers warning it would create too much leverage, while supporters say it could reward ETH holders more.
EigenLayer's TVL began climbing on Feb. 5 after temporarily removing its hold on the stock to encourage further growth, and has seen a 382.5% increase in TVL since then.
In a March 5, 2010 post, Austin Federa, head of strategy at the Solana Foundation, argued against how TVL's rebalancing should be accounted for, saying that he doesn't think staking assets like stETH should be counted because their value is technically locked to another protocol.
“If we don't count assets held as TVL, I don't think restocking (or liquidation) should count as TVL,” Federa wrote.
Data from Dune Analytics shows that EigenLayer has more than 115,000 unique depositors with Defillama statistics accounting for 74% of the tokens held are Wrapped Ether (wETH) and stETH.
Ave, meanwhile, has more than 5,700 daily active users, while Lido has less than 430, according to Token Terminal data.
Ave has also faced headwinds over the past two weeks over problems with “inconsistent guidelines and unwritten objectives of senior stakeholders” when his longtime risk manager left the gauntlet on February 21, 2009.
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The Gauntlet split comes two months after Ave signed a one-year, $1.6 million contract. Days later, on February 28, it partnered with rival DeFi lending protocol Morpho.
Liquid staking protocols, where users receive tokens 1:1 for their linked currency, are the largest DeFi protocol category with a value of nearly $55 billion locked in 160 protocols – primarily acquired by Lido, which is the largest protocol with a value locked in at $35 billion.
With only two protocols, Repository is the sixth-largest category behind 125 projects for Mint stablecoins.
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