Eigenlayer Surges Past Aave in TVL, Sparking Debate on Liquid Staking’s Role in DeFi Metrics
The restaking protocol EigenLayer has overtaken Aave in total value locked, raising questions about the inclusion of liquid staking in DeFi TVL calculations and the implications for the sector.
In a remarkable turn of events, EigenLayer, a restaking protocol, has outpaced the popular decentralized finance (DeFi) protocol Aave in total value locked (TVL), signaling a potential shift in the DeFi landscape. With EigenLayer’s TVL hitting $11.24 billion and Aave’s at $10.7 billion, the community is abuzz with discussions on the implications of this development and the role of liquid staking in TVL calculations.
The surge in EigenLayer’s TVL can be traced back to its decision to temporarily lift deposit caps, a move that catalyzed an impressive 844.6% year-to-date growth. This strategic adjustment not only propelled EigenLayer to new heights, surpassing Aave’s 21-month high but also positioned it as a formidable contender in the DeFi space, second only to staking giant Lido.This shift has sparked a lively debate among industry experts and enthusiasts alike. The core of the discussion revolves around the inclusion of liquid staking assets, such as Lido Staked ETH (stETH), in the TVL metrics. With EigenLayer allowing users to deposit native staked ETH or liquid staked ETH into its smart contracts, questions arise about the potential for inflating TVL figures through what some might view as double or even triple counting of assets.
Carlos Mercado, a data scientist at Flipside, emphasizes the importance of distinguishing between native and synthetic assets to avoid overstating a chain’s TVL.
If you don’t adjust for this, you get into an issue of inflating the chain’s TVL, since the same token can be counted multiple times over.
This sentiment is echoed by Blockworks Research analyst Ren Yu Kong, who suggests that staking contracts with withdrawal credentials pointed towards EigenLayer could be considered a form of smart contracts, thereby justifying their inclusion in TVL calculations.
The debate extends beyond mere numbers, touching upon the broader implications for the DeFi ecosystem. Austin Federa, Solana Foundation’s strategy head, challenges the conventional approach to TVL accounting in the context of restaking, questioning the inclusion of staking-derived assets like stETH in TVL figures.
Despite these concerns, the rise of EigenLayer and the increasing popularity of liquid staking protocols signal a growing interest in mechanisms that offer additional rewards for staked assets. However, this trend is not without its critics, as some Ethereum developers warn of the risks associated with excessive leverage.
The conversation around EigenLayer’s ascendancy and the role of liquid staking in DeFi metrics highlights the dynamic nature of the sector and the ongoing need for clarity and consensus on key performance indicators. As the DeFi landscape continues to evolve, the community’s ability to adapt and address these challenges will be crucial in shaping its future direction.
