DeFi TVL Hits New High As Lido Expands Its TVL
DefiLlama’s data reveals that the current total value locked (TVL) in the decentralized finance (DeFi) sector, including the staking market, has reached an all-time high of $63 billion in 2023.
Lido Staking Protocol Increases Its TVL
Lido, the leading liquid staking protocol, has contributed significantly to this figure by increasing its TVL to over $10 billion. However, even without staking, the TVL has crossed the critical threshold of $50 billion for the second time in March since the FTX crisis.
Lido Liquid Staking has increased its TVL on five different chains and currently holds a dominant position of 16.9%. Its TVL includes staked tokens across multiple chains, with Ethereum being the blockchain where Lido has the highest presence.
The protocol’s remaining liquidity is also spread on Terra Classic, Moonbeam, Moonriver, and Solana. Last April, the pool’s total value reached an all-time high of more than $20 billion.
Unfortunately, the LUNA crisis in May caused a sharp decline in its TVL. However, the platform recovered from the setback through incentives offered in the Curve pool before the FTX collapse further weakened the market.
Excluding staking, DeFi’s TVL surpassed $50 billion last month for the first time since the market felt the impact of the FTX saga in November 2022. Although it briefly dropped below this level at the start of March, the TVL has since recovered.
Ethereum Shanghai Upgrade Increases Interest In Liquid Staking
Meanwhile, the highly anticipated Shanghai upgrade for Ethereum set for next month has skyrocketed the demand for Lido. Once the upgrade is implemented, stakers will be able to withdraw their staked ETH, which is expected to boost the popularity of Lido further.
In addition to the potential surge in demand, the upgrade could also positively impact the price of Ethereum. Lido currently holds a significant amount of stETH, with 5.8 million of the token in its possession.
According to Fundonomics, a crypto researcher, the protocol boasts over 44,000 ETH depositors. Despite having strong partnerships, Fundonomics believes Lido’s biggest competitor is Rocket Pool.
DefiLlama reports that Rocket Pool holds 441,832 staked ETH, placing it in third position behind Lido and Coinbase’s wstETH (Wrapped Staked ETH). By staking ETH, Coinbase customers can acquire an ERC20 utility token.
On the other hand, Rocket Pool has contributed a substantial $806 million to the TVL in the DeFi space. According to Fundonomics, Rocket Pool’s position as the first and largest decentralized node operator for Ethereum gives it an advantage in the liquid staking sector.
Aside from Lido and Rocket Pool, other protocols such as Ankr and StakeWise have also been experiencing a rise in demand.
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