The forerunner of the liquid staking derivatives market, Lido became the largest decentralized finance (DeFi) app by total value locked (TVL) earlier this month, surpassing MakerDAO.
Lido’s claim to the throne comes after a period of steady growth for the staking-as-a-service provider. In just the last month its TVL has spiked 33% at press time, according to data from DeFiLlama.
Users have locked $7.8 billion on Lido. The vast majority of that sum comes from Ethereum, with smaller amounts from other blockchains, including Solana.
Interest in liquid staking protocols has swelled in 2023 as governance tokens for these protocols have surged in price. For example, since Dec. 31 to now, the price of LDO has jumped 108% to $2.01, while its average 24-hour volume rose 802%, per CoinGecko. Holders of LDO have a say in how the protocol is managed, from setting fees to assigning node operators.
The present attention and popularity of liquid staking protocols has prompted a narrative in the crypto community marked by users’ excitement and elevated willingness to learn about these liquid staking protocols. Lido has been able to gain momentum for its TVL, a popular indicator of the health and interest of the app.
Lido’s TVL dropped from $20.4 billion in April 2022 to as low as $4.2 billion two months later following the collapse of Terra, but its TVL has grown rapidly in 2023. Lido’s TVL increased in the past seven days and month by 20.02% and 33.13%, respectively, allowing Lido to claim the top rank in DeFi protocols by TVL for the first time.
Lido’s recent climb comes ahead of the Ethereum blockchain’s Shanghai upgrade, the first hard fork since the Merge in September. Set for March, Shanghai will notably allow ETH stakers to withdraw their tokens, which are currently locked on the Ethereum network.
With 20 active developers per Token Terminal, Lido has become the most popular liquid staking protocol, commanding a 29% share of the…
