As of February 7th, 2023, the Ethereum-based liquid staking sector has seen its value locked surpass $11 billion. The growth in this area has been largely driven by several platforms, including Lido, Coinbase, and Rocket Pool, who have seen 4-10% gains over the past month. With over 73% of the total value locked (TVL), Lido currently holds the largest portion of the 6.87 million ether that’s being held by the 11 liquid staking protocols.
Liquid Staking Becomes Highly Sought-After Trend
The popularity of staking Ethereum has risen greatly since its introduction on the network’s Beacon chain. The Beacon chain currently holds 16.47 million ether, which is worth approximately $26 billion and cannot be withdrawn until the upcoming hard fork in March. A large portion of this locked ether is being held within liquid staking protocols, with 11 decentralized finance (DeFi) protocols holding 41% of the total or 6.87 million ether.
Liquid Staking Explained
Liquid staking refers to exchanging ether for tokenized versions of the cryptocurrency. This allows holders to earn rewards while still having a liquid form of the coin that they can sell at any time without relying on a custodian. The staked ether is being held within various protocols, and these platforms handle the exchange and minting/redemption processes. Out of the 41% of the total, valued at over $11 billion, Lido holds 73% of the total value locked (TVL). The value locked in Lido increased by 4.27% last month, and its TVL is now around $8.18 billion.
Coinbase’s Wrapped Ether Leads the Pack
Coinbase’s wrapped ether platform has 1,081,304 ETH locked in, and its TVL has grown by 5.74% in the past month. The Coinbase wrapped ether platform TVL accounts for 15.72% of the market share and is worth $1.76 billion. Rocket Pool and Frax Ether were the two largest platforms to see the greatest gains over the past month, with Rocket Pool’s TVL climbing 10.71% in 30 days and Frax Ether’s TVL increasing by 76.73%. Rocket Pool has approximately 387,016 ETH locked in, while Frax Ether holds 87,134 ether. Stakewise, the fifth-largest liquid staker, holds 84,481 ether, valued at $136 million, as of February 7th, 2023. Frax Ether holds a 1.27% market share and Stakewise holds 1.23% of the 6.87 million ether. The other six DeFi liquid staking platforms account for only 2.6% of the $11 billion in value, while the top five liquid stakers control over 97.4% of the market.