Three Leading Liquid Staking Derivatives (LSDs) Hold 11 Million Ether
Recently, the total amount of ethereum (ETH) locked in liquid staking derivatives (LSD) protocols surpassed 12 million ETH, with an additional 370,000 ETH added in just five days. LSD platforms are decentralized platforms that allow users to stake their ETH in a liquid form, offering flexibility and liquidity while earning rewards.
The three dominant LSD protocols are Lido, Rocket Pool, and Coinbase’s Wrapped ETH platform, which together control 89.18% of the LSD market. Lido Finance is the largest holder of ETH with 8.79 million ETH, representing 70.96% of the LSD market share.
Lido offers staked ether (STETH) in exchange for ETH, and it has become one of the top ten tokens by market capitalization. STETH has over 269,000 unique addresses holding it and has recorded approximately 1.15 million transfers. The circulating supply of STETH is currently at 8,790,000.
Coinbase’s Wrapped ETH platform is the second-largest LSD project with around 1.3 million ETH valued at $2.26 billion. There are currently 40,653 unique addresses holding the CBETH token. The distribution of CBETH is more concentrated than STETH, with the top 100 holders owning 96.43% of the circulating supply.
Rocket Pool holds 951,264 ETH and accounts for a market share of 7.68% in the LSD market. When exchanging ETH using Rocket Pool, users receive RETH tokens. RETH has 18,784 holders and has recorded nearly 198,000 transactions.
The Growth and Criticisms of LSDs
Liquid staking derivatives have found a place in decentralized finance (defi) by allowing users to stake without any minimum requirements. According to Coingecko’s research, the top eight LSDs have yielded an average of 4.4% annual percentage yield (APY) since January 2022.
However, LSDs face criticism for potentially centralizing the supply and validators. On the other hand, some proponents argue that LSDs enhance the decentralization and security of Ethereum by diversifying the validator set.
Hot Take: Liquid Staking Derivatives Revolutionize Staking on Ethereum
Liquid staking derivatives have emerged as a popular choice for Ethereum holders, offering a flexible and liquid way to stake their ETH while earning rewards. The dominance of platforms like Lido, Rocket Pool, and Coinbase’s Wrapped ETH demonstrates the growing demand for these protocols.
Despite criticisms, LSDs have proven to be a valuable addition to decentralized finance, providing users with more options and opportunities in staking. As the market continues to evolve, it will be interesting to see how LSDs contribute to the overall growth and development of the Ethereum ecosystem.
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