EigenLayer Flips Aave to Become Second-Largest DeFi Protocol

CryptoMode
2 min readMar 7, 2024

Ethereum restaking protocol EigenLayer has surpassed lending provider Aave to become the second-largest protocol by total value locked (TVL), trailing only Lido.

EigenLayer Overtakes Aave, Now Second-Largest DeFi Protocol

DefiLlama data shows that EigenLayer’s TVL hit an all-time high of $11 billion on Mar. 5, beating Aave’s 21st-month high of $10.7 billion. This put EigenLayer in second place in the DeFi rankings with Lido’s staking protocol, which has $35 billion TVL.

While both platforms’ TVLs have dropped slightly to $10.4 billion for EigenLayer and $10.35 billion for Aave, the lending protocol has been decisively dethroned from its long-held position as the second-largest DeFi protocol.

EigenLayer’s developers temporarily lifted the staking cap on Feb. 5th, allowing unlimited contributions. This led to the protocol’s meteoric rise and helped its TVL rise by 382.5% in the past month.

In an X post on Mar. 5, Austin Federa, the strategy head of the Solana Foundation, questioned how restaking TVL is counted. He said that staking-derived assets like stETH shouldn’t be counted because their value is legally locked on another protocol.

According to Dune Analytics data, EigenLayer has over 115,000 unique depositors and has rapidly emerged as a significant player in this burgeoning sector.

In contrast, while still at over 5,700 daily active users, Aave’s demotion compounds recent challenges, including the exit of risk manager Gauntlet amid internal conflicts and struggles to navigate “inconsistent guidelines and unwritten objectives.”

Originally published at https://cryptomode.com/ on March 6, 2024.

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