Is the DeFi lending craze cooling down again? EigenLayer sees net outflow of $4.4 billion in June, while the total value locked (TVL) in LRT protocol drops by 20%.

As the craze for yield farming gradually cools down, leading Layer 1 protocol EigenLayer experienced its largest outflow in nearly three months this month, with a whopping $4.4 billion outflow in June alone. The Total Value Locked (TVL) of other Layer 1 protocols also dropped by 20%-30% within the month. The reason behind this seems to be the end of airdrop events, leaving farmers disinterested.

EigenLayer Sees $4.4 Billion Net Outflow in June

DeFiLlama data shows that EigenLayer, which garnered attention in the first half of this year, reached an all-time high Total Value Locked (TVL) of $20 billion in early June, but has now decreased to $15.59 billion.

In other words, EigenLayer's TVL dropped by 23% within a month, resulting in a loss of over $4.4 billion.

Moreover, the protocol experienced its largest net outflows in nearly three months on July 8th and 17th, amounting to $750 million and $700 million respectively.

It is evident that since reaching a new high in TVL in June, funds have been flowing out of EigenLayer more than they have been flowing in, and this trend has been increasing over time.

TVL of Other Staking Protocols Shows Significant Declines

However, despite being a leader, EigenLayer's loss is relatively small compared to the recent average 20% to 30% declines in the TVL of other LRT protocols:

• Renzo: From $3.93 billion in early June to the current $2.06 billion, a decrease of about 47.6%
• Puffer: From $1.79 billion in early June to $1.7 billion currently, a decrease of about 6%
• Kelp DAO: From $1.17 billion in early June to $860 million currently, a decrease of about 26.5%
• Swell: From $3.03 billion in early June to $2.42 billion currently, a decrease of about 20.3%
• Eigenpie: From $1.03 billion in early June to $830 million currently, a decrease of about 20%

Additionally, the TVL of Pendle, a chain-linked interest derivatives market closely related to LRT protocols, has also suffered a significant blow, dropping from $6.71 billion in early June to $3.83 billion currently, a decrease of 43%.

The underlying reason for this is believed to be the expiration of multiple liquidity mining derivatives, which has had a significant impact on the locked value of the protocols.

Pendle's Locked Value Shrinks by 40%: End of LRT Derivatives Mining + Decline in Staking Enthusiasm

Reason: Airdrops Ending, Farmers Losing Interest

The significant decline in TVL of staking protocols is mainly attributed to the end of major LRT protocol airdrop events.

In particular, tokens such as REZ from Renzo and EIGEN from EigenLayer were open for token queries and claims in April and May, marking the end of airdrop activities. This caused liquidity miners to lose motivation to continue participating in the protocols and move their funds to other protocols with more profit potential.

Why has the recent decline in staking activities occurred? Could it be related to EigenLayer's token issuance intentions?

However, the TVL of the Swell protocol, which has not yet announced token issuance, has also seen a significant decrease. This could be due to market speculation about limited airdrop opportunities and profits, prompting funds to move elsewhere. It could also indicate a waning interest in EigenLayer and other related LRT protocols within the community.