• Liquid staking market witnessed parabolic growth in 2023, outpacing all other competitors to emerge as the largest sub-sector in the DeFi economy.
• The total value of crypto assets staked through liquid staking protocols increased from $7.9 billion to $18.8 billion, according to an analyst from Token Terminal, more than doubling on a year-to-date (YTD) basis.
• Lido Finance [LDO] remained head and shoulders above its competitors in the burgeoning landscape, capturing a mammoth 74% market share.
DeFi Liquid Staking Market Success
Rapid Growth
The Liquid staking market has witnessed parabolic growth in 2023, outpacing all other competitors to emerge as the largest sub-sector in the DeFi economy. The total value of crypto assets staked through liquid staking protocols increased from $7.9 billion to $18.8 billion, according to an analyst from Token Terminal, more than doubling on a year-to-date (YTD) basis.
Benefits of Liquid Staking Protocols
Liquid staking protocols arose to fill shortcomings in the conventional Ethereum [ETH] staking mechanism. These entities allow users to directly participate in staking while also maintaining the ability to use them elsewhere in DeFi for higher yield opportunities. The prospect of amplifying their rewards drove many users to the disruptive world of liquid staking. Moreover, liquid staking protocols offered one of the most stable fee streams in the Web3 industry, as per the Token Terminal analyst.
Lido Captures 74% Market Share
Lido Finance [LDO] remained head and shoulders above its competitors in the burgeoning landscape, capturing a mammoth 74% market share. Notably, Shapella upgrade catalyzed demand for newer markets such as Lido’s that enabled users not only stake their ETH but also withdraw it without any loss or penalty charges applied by most traditional exchanges and wallets alike..
Shapella Upgrade Boosted Stake Rewards
Stake rewards got a boost after Shapella Upgrade enabled users to withdraw their ETH without any loss or penalty charges applied by most traditional exchanges and wallets alike – which was once considered a risky proposition before this upgrade took place.. This facilitated an increase in liquidity and amplified user’s rewards which further contributed towards increasing Lido’s market share significantly during this period..
Conclusion
The total value of crypto assets deposited through liquid staking protocols has more than doubled on a year-to-date (YTD) basis due largely because of Shapella Upgrade which made withdrawing ETH much easier for users while at same time allowing them amplify their rewards significantly with help of liquidstaking protocols such as Lido – whose market cap currently stands at 74%.
