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Liquid staking TVL surpasses lending, becomes the second-largest among DeFi services

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The total value of crypto assets locked in liquid staking services rose to US$14 billion on Monday to surpass lending protocols ahead of Ethereum’s Shanghai update. 

See related story: Shanghai Staking Surge

Fast facts

  • The recent surge makes liquid staking the second-largest service among decentralized finance (DeFi) protocols, according to DefiLlama data. Decentralized exchange protocols top the rankings with US$19.7 billion.
  • Liquid staking protocols allow users to receive derivative tokens such as Staked Ether on a 1:1 basis. These tokens allow users to lock their funds to generate yield. 
  • More than 16.5 million Ether (ETH) are staked in Ethereum, with 42% coming from liquid staking protocols, such as Lido Finance, Frax Ether and Rocket Pool.  Lido is responsible for 75% of the liquid staked ETH. 
  • Ethereum’s Shanghai upgrade, scheduled for next month, will allow investors to withdraw their locked Ether and accumulated interest for the first time. Ahead of the upgrade, Lido saw an inflow of  US$240 million in ETH last Saturday.
  • Lido’s governance token, LDO, is on a 200% rally this year. The governance tokens of rivals Rocket Pool and Frax are also up by 138% and 14%, respectively,  according to CoinMarketCap data. 

See related article: Go ahead and ban staking. Crypto investors will just go elsewhere

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