Introduction
Each month, Chaos Labs delivers comprehensive, data-driven analysis of Renzo’s key metrics, ensuring full transparency for the community. By closely monitoring utilization trends, liquidity dynamics, and borrower behaviors, Chaos Labs aims to proactively identify and mitigate emerging risks to maintain protocol stability.
Performance
ezETH maintained a steady upward trajectory throughout December, reflecting consistent yield accrual and stable protocol performance. The ratio increased from 1.0660 at month-start to 1.0683 at month-end, a realized monthly APR of approximately 2.67%.
During December, ezETH price deviations initially compressed towards peg, with discounts narrowing to as little as 0.01% . Deviations then widened temporarily through mid-December, reaching a peak absolute deviation of approximately 0.16% as ezETH traded at a deeper discount to ETH. While deviations partially narrowed toward month-end, they remained wider than early-month levels, indicating a modest softening in secondary market pricing while overall peg stability was preserved, with overall deviation magnitudes improving relative to the previous month.
Throughout December, Renzo experienced intermittent but pronounced net outflows, concentrated primarily in early- to mid-month periods, which drove a stepwise reduction in total TVL. As a result, TVL declined from early-month levels above 230k ETH to 207k ETH by month-end, after which it stabilized.
Liquidity
Renzo’s withdrawal buffer remained sufficient throughout December, though balances declined notably toward month-end. Early in the month, the buffer was bolstered by a combination of ETH and stETH, peaking above 50k ETH equivalent during brief replenishment events. As withdrawals accelerated mid-month, the buffer was drawn down, ending December at approx. 16.3k ETH and 1.4k stETH, indicating reduced liquidity, especially for stETH.
Over the past month, liquidity decreased across chains. Arbitrum was the only network to record a significant increase in ezETH holdings, while Ethereum, Base, Linea, and Unichain all experienced declines in both ezETH balances and exit liquidity. Ethereum saw the most pronounced contraction in available DEX liquidity due to deleveraging from the Curve ezETH/pzETH pool. Despite this, Ethereum continued to maintain meaningful liquidity in Fluid, providing a residual on-chain liquidity buffer.
Composabilty
December was dominated by significant deleveraging on Aave, which drove the majority of the observed decline in ezETH usage across external protocols. ezETH balances on Aave fell sharply from over 123k ezETH in early December to approximately 79.6k ezETH by month-end, reflecting large-scale position unwinds and reduced leveraged demand. Outside of Aave, ezETH balances across other integrations such as Compound, Morpho Blue, and Fluid remained relatively stable.
The reduction in ezETH composability during December was driven primarily by deleveraging on Aave’s Ethereum Core market. Borrowing against ezETH on Core declined sharply from approximately $150M in early December to around $50M by mid-month, reflecting a rapid unwind of leveraged positions. In contrast, the Ethereum Prime market remained comparatively stable, with borrowing holding near $10M USD throughout the month.
Ethereum-Core
Ethereum-Prime
On Ethereum-Prime, the composition and size of top supplier positions remained largely unchanged, with similar supply and borrow profiles across the largest ezETH holders. In contrast, the Core market showed a clear contraction in leverage among top suppliers, with substantially smaller borrow positions against ezETH relative to the previous month. This pattern indicates an orderly unwind of leverage rather than a shift in supplier concentration.
Ethereum-Prime
Ethereum-Core
Summary
Deleveraging across Aave, combined with declining liquidity buffers and cross-chain DEX liquidity, indicates softer demand for ezETH during the month. While the peg remained stable, continued monitoring of liquidity depth as well as activities on Aave will be essential as market conditions evolve.