Ethereum Liquid Staking Trend Continues to Swell; 5 Platforms Control 97% of Market

As of Feb. 7, 2023, the value locked in 11 Ethereum-based liquid staking protocols has risen above $11 billion, with Lido, Coinbase, and Rocket Pool recording 4-10% gains over the past month. Lido holds more than 73% of the total value locked (TVL) out of the 6.87 million ether held by the 11 liquid staking platforms. More than 15% of the liquid staking TVL is being staked with Coinbase’s wrapped ether.

Staking Ethereum has become a highly sought-after trend since its introduction on the network’s Beacon chain. The Beacon chain contract has 16.47 million ether locked, worth $26 billion, that cannot be withdrawn until the upcoming March hard fork. A significant portion of this locked ether is held within liquid staking protocols, as 11 decentralized finance (defi) protocols hold 41% of the total, or 6.87 million ether.

Liquid staking involves exchanging ether for tokenized versions of ether. 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 held within various protocols, and the platforms handle the exchange for minting and redemption processes. Out of the 41%, which is valued at more than $11 billion, Lido holds 73% of the total value locked (TVL). Lido’s TVL saw a 4.27% increase last month, and its value locked is around $8.18 billion today.

Coinbase’s wrapped ether has 1,081,304 ethereum (ETH) locked into the platform and the TVL has gained 5.74% last month. The Coinbase wrapped ether platform TVL is 15.72% of the market share and the stash is worth $1.76 billion. The next two largest liquid staking platforms saw the biggest gains over the last month out of the top five projects. Rocket Pool’s TVL climbed 10.71% in 30 days and during the same time frame, Frax Ether’s TVL increased by 76.73%. Rocket Pool has around 387,016 ETH locked and Frax Ether has a total of 87,134 ether.

Stakewise is the fifth-largest liquid staker, with 84,481 ether locked on Feb. 7, 2023, valued at $136 million. Frax Ether holds a 1.27% market share, while Stakewise holds 1.23% of the 6.87 million ether. The other six decentralized finance liquid staking platforms hold a mere 2.6% of the $11 billion in value, while the top five liquid stakers control 97.4%.

What do you think about the continued growth of Ethereum Liquid Staking protocols? Share your thoughts in the comments section below.