Liquid staking protocols continue to gain popularity in the wake of the Shapella hard fork on April 12, 2023, which resulted in the withdrawal of approximately 332,368 ether, valued at around $699 million. Despite these withdrawals, liquid staking protocols like Lido, Rocketpool, and others have experienced an increase in ether deposits over the last 30 days. Since March 14, a total of 281,498 ether worth $592 million have been added to these protocols.
Staked Ether accounts for over 30% of Defi’s locked value, with Lido leading the pack. As of April 15, 2023, there’s $53.68 billion total value locked (TVL) across various decentralized finance (defi) protocols. Around $16.96 billion or 31% of today’s defi TVL is in staked ether. Lido’s TVL stands at approximately $12.74 billion, accounting for 23.74% of defi’s locked value. The rising price of Ethereum (ETH), above the $2,100 per unit range, along with deposits into ETH-based liquid staking protocols have contributed to an increase in value for these platforms.
The growth of liquid staking protocols has been impressive, with Lido’s TVL growing by 18.02% over the past 30 days. Coinbase’s liquid staking protocol has risen by 16.51% within the same period. Rocketpool’s TVL has surged by 22.48%, while Stakewise has expanded by 15.83%. Archive data from March 14, 2023, shows that 7,749,372 ETH were locked in liquid staking platforms; as of April 15, that number is up to 8,030,870 ETH – an addition of 281,498 ether in just one month.
Simultaneously, since the Shapella hard fork integration, a total of 332,368 ether has been withdrawn from the validator queue. Current pending withdrawals account for about 1.48 million ether worth of funds. The annual percentage rate (APR) for staking ETH currently sits at around 4.98% today. Presently, the Beacon chain contract holds 18,386,887 ETH, valued at $38.67 billion.
Approximately 81% of ETH validators have updated their withdrawal addresses, while 18.5% have not, as per Nansen statistics. The three entities with the highest number of withdrawals are Kraken, Binance, and Coinbase. It is speculated that Kraken and Coinbase have initiated a large portion of these withdrawals due to issues with U.S. regulators concerning liquid staking protocols.
However, the increasing popularity of liquid staking protocols has raised some regulatory concerns. These protocols offer depositors the ability to use staked tokens as collateral for other investments. This creates a potential risk for the entire DeFi ecosystem. As a result, regulators are closely watching liquid staking protocols to ensure that they are complying with applicable laws and regulations.
Despite these concerns, many experts believe that the future of liquid staking protocols is bright. They provide a way for ETH holders to earn staking rewards without having to wait for the deposit period to end. This has made staking a more attractive investment option for many users. Additionally, liquid staking protocols provide an opportunity for new participants to enter the staking market without having to hold a large amount of ETH.
In conclusion, the growth of liquid staking protocols remains strong despite the recent withdrawals. The rising price of ETH and increasing interest from investors has resulted in a surge in value for these platforms. However, regulatory concerns and market volatility may impact their popularity in the months to come. Only time will tell how successful these protocols will be, but they offer exciting possibilities for the future of DeFi.
