The full worth locked (TVL) of restaking protocol EigenLayer has surpassed that of fashionable decentralized finance protocol Aave, making it the second largest protocol through TVL.
This comes after EigenLayer’s choice to briefly take away deposit caps on its community.
On the time of writing, the TVL for EigenLayer sits at $11.24 billion, whereas the TVL for Aave is at $10.7 billion, in accordance with info accessible on DeFiLlama.
The TVL “flip” has drawn in commentators who increase the query about whether or not or not staking, or liquid staking, ought to be included in a protocol’s TVL if staked native belongings are typically not included within the depend.
On a DeFi protocol like Aave, TVL incorporates the entire quantity of tokens deposited into a wise contract and used as collateral to borrow and earn yield. On this case, borrowed cash should not included within the TVL to stop inflating the TVL.
Nevertheless, on EigenLayer, customers can take part in securing the community and earn additional rewards by depositing already native staked ETH or liquid staked ETH into the community’s good contracts and subjecting them to slashing situations.
Carlos Mercado, a knowledge scientist at Flipside, advised Blockworks that TVL is designed to be an financial solution to measure participation. He notes that you will need to differentiate between native belongings corresponding to ETH from artificial variations of the identical asset, like wrapped ETH or staked ETH.
“For those who don’t alter for this, you get into a difficulty of inflating the chain’s TVL, because the similar token will be counted a number of instances over,” Mercado mentioned.
This logic will also be utilized to protocol-specific TVLs, he mentioned. Including that EigenLayer itself is a restaking, which means that depositing stETH or cbETH may very well be thought of triple counting TVL.
Blockworks analysis analyst Ren Yu Kong notes that TVL has traditionally been used as a metric to measure the entire quantity of belongings in a wise contract.
“One may depend staking contracts with withdrawal credentials pointed in direction of EigenLayer’s contracts as a model of good contracts, and thus EigenLayer TVL would depend as TVL within the widespread sense,” Kong mentioned.
