Demand For Liquid ETH Staking Options Keeps Growing – Nansen
Nansen, a blockchain analytics platform, conducted a study recently. The result revealed that Ethereum staking has increased across various platforms since the Ethereum Merge.
The September 15th Merge was generally a significant boost for the DeFi (decentralized finance) sector. Since Ethereum transitioned to the PoS (proof-of-stake) mechanism, the demand for staking solutions has increased.
Nansen’s report stated that the introduction of stETH (staked Ethereum) after the Merge had changed the DeFi landscape. stETH, as a yield-bearing product, has outperformed other collateralized yield-bearing offerings.
Nevertheless, Uniswap, liquidity providers, and automated-market marks are still popular. However, compared to the TVL (Total Volume Locked) in staked Ethereum solutions, they are nothing.
According to reports, more than 15.4 million Ethereum is locked in ETH’s staking contract. Thus, the current market valuation pushes the total stETH to the top six cryptos.
The Nansen report read, “StETH is the first yield-bearing product to attain great heights in the DeFi sector. Also, it has the potential to keep growing till it transforms the entire ecosystem.”
Furthermore, the Nansen reports also provide analysis for liquid-staked derivatives. After Ethereum moved to PoS, the platform no longer needed miners.
After the switch, Validators replaced miners. However, they must be willing to stake 32 ETH to gain the right to prepare new blocks and receive rewards.
Those users who could not afford to stake 32 ETH took part in liquid staking (pool staking). With liquid staking, users can withdraw their stETH whenever they want.
Rocket Pool And Lido Hold About 40% Of stETH
According to Nansen’s analytics, long-term holders make up a larger share of liquid stake holdings. Also, newly announced protocols are drawing new deposits significantly higher than existing services.
In addition, over 40% of the total ETH that has been staked is held in staking pools such as Rocket Pool and Lido. Both staking pools represent over 5.7 million out of 14.5 million stETH.
Lido’s stETH pool is dominant in the market, having a 79% share of total staked ETH. Curve, Aave, and Lido’s wrapped stETH (wstETH) hold over 52% of stETH tokens.
Meanwhile, stETH’s average daily trading volume has increased by 127% after the September 15th Merge. Also, the staking pools that belong to Coinbase (cbETH) and Rocket Pool (rETH) have witnessed immense growth in the last three months.
They have grown by 43.3% and 52.5%, respectively. cbETH’s supply has surpassed that of other assets apart from stETH despite being launched three months ago. Additionally, the expansion of Coinbase’s ETH staking offering implies that retail investors continue to trust centralized institutions.
Hence, they are comfortable receiving yield through staked ETH rather than more complicated yield-bearing techniques.
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