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 trajectory throughout January, reflecting consistent yield accrual and stable protocol performance. The ratio increased from 1.068437 at month-start to 1.070808 at month-end, a realized monthly APR of approximately 2.7%.
ezETH preserved peg stability throughout January, with no sustained dislocations observed. Price deviations decompressed at the beginning of the month, with ezETH trading at a discount that briefly widened to approximately –0.185%. Deviations then tightened through mid-January, indicating improving peg alignment. While ezETH continued to trade at a small discount toward month-end, deviation magnitudes remained contained and improved relative to prior periods, suggesting resilient secondary market pricing.
| Price Deviation in January | Value (basis points) |
|---|---|
| Mean | -8.6 |
| Median | -8.1 |
| Highest (closest to peg) | -3.4 |
| Lowest (largest discount) | -18.5 |
Throughout January, Renzo experienced intermittent netflows, concentrated primarily in the second half of the month, which drove a net increase in total TVL. TVL increased from 207k ETH at the beginning of the month, to 212k ETH by the end of the month.
Liquidity
In January, Renzo’s withdrawal buffer underwent two notable shifts.
First, ETH balances declined meaningfully toward month-end. Early in the month, the buffer was predominantly composed of ETH, accounting for over 90% of total buffer assets. Over the course of January, this composition shifted, with ETH’s share declining to approximately 25%, alongside a corresponding increase in stETH holdings. This transition accrues more yield to ezETH. stETH held within the withdrawal buffer continues to accrue staking yield, allowing the protocol to generate incremental revenue without materially impacting available secondary market liquidity.
The total size of the withdrawal buffer increased on a net basis over the month, strengthening Renzo’s ability to service withdrawals.
Across DEX venues, total liquidity remained broadly stagnant throughout January. While Base saw an early-month influx of ezETH liquidity, pool compositions across Linea, Arbitrum, and Base shifted increasingly toward exit assets such as wETH, with a reduction in the ezETH component within pools over the month.
Composability
In January, the deleveraging trend across Aave persisted, though at a lesser pace relative to prior months. Net ezETH supply on Aave declined by approximately 8% over the month, driving the majority of the observed reduction in ezETH usage across external protocols. ezETH balances on Aave across all markets decreased from over 79k ezETH in early January to approximately 74k ezETH by month-end.
Outside of Aave, ezETH composability saw no drastic shifts. The Compound market TVL doubled over the course of January. ezETH balances across other integrations, remained broadly stable.
Borrowing activity against ezETH continued to soften on both the Core and Prime markets. While the composition of borrowed assets remained largely unchanged and continued to be dominated by wstETH, borrow balances declined in USD terms primarily due to ETH price movements over the month and some outflows from Aave. A reduction in USDT-denominated borrowing was also observed, with USDT borrowed against ezETH collateral declining from approximately USD 2.0 million to USD 0.2 million, reflecting a broader reduction in stablecoin-based leverage.
Ethereum-Core
Ethereum-Prime
On Ethereum Prime, the size and composition 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 reduction in collateral supplied against stablecoins, consistent with declining borrow demand.
Ethereum-Core
Ethereum-Prime
Summary
January was characterized by stable protocol performance amid moderating deleveraging. ezETH continued to deliver consistent yield and maintained peg stability. Improvements in withdrawal buffer size and composition strengthened near-term withdrawal demands while preserving APR.
Continued monitoring of withdrawal buffer dynamics, DEX liquidity, and borrowing activity on Aave will remain essential as market conditions evolve.