23 April, 2024



Liquid Staking Protocols Witness 292% Increase In Staked Assets

05 Sep, 2023

05 Sep, 2023

  • Liquid staking is inching towards an all-time high after a $15 billion surge in locked assets. 
  • On-chain data shows that the total value locked in DeFi staking protocols has jumped nearly 300%. 
  • Liquid staking has overtaken lending as the biggest segment of decentralized finance. 

The liquid staking sector of the broader decentralized finance (DeFi) space is reportedly heading toward an all-time high after shedding off the low momentum induced by the prolonged crypto winter. Liquid staking protocols like Lido and Rocket Pool have increased pledged crypto assets by nearly 300% since last year’s crypto contagion that began in June.

According to a report by Bloomberg, liquid staking recently overtook lending to become the biggest segment of the DeFi space. This was possible after crypto users pledged approximately $15 billion in crypto assets, marking a 292% increase in the total value locked (TVL) on liquid staking protocols compared to the lows of June 2022. 

Data from the on-chain analytics platform DeFiLlama showed that 116 liquid staking protocols boasted a combined $20.7 billion in crypto assets locked in staking services. Nearly 300 DeFi lending protocols accounted for $13 billion in combined TVL. Meanwhile, decentralized exchanges (DEX) and cross-chain bridges had a TVL of $11.9 billion and $8.4 billion respectively. 

Rocket Pool and Lido reached an all-time high in April 2022 in terms of TVL, with more than $21 billion in staked assets. However, the dramatic implosion of Terraform Labs and associated crypto tokens like UST and LUNA triggered a crypto contagion and the subsequent crypto winter. During this period, the prices of crypto tokens reduced significantly, and interest in DeFi services including staking and lending faded. 

However, liquid staking’s recent recovery brought it in the vicinity of its all-time highs. Ethereum’s widely anticipated merge earlier this year shot on-chain staking into the limelight, prompting thousands of crypto users to line up for staking rewards from various proof-of-stake (PoS) blockchains. At the time of writing, Lido was the top liquid staking protocol with over $14.1 billion in total value locked, followed by Coinbase Wrapped Staked ETH, which had a TVL of $2.1 billion. 

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