Lido Finance (LDO) Ranked First by TVL Among DeFi Protocols

Lido Finance overtakes Maker to become the protocol with the highest TVL in DeFi.

A human with a swimming cap on jumping to a pool from a pink inflatable swimming wheel
  • Lido Finance overtakes Maker to become the protocol with the highest TVL in DeFi.
  • The protocol has a majority share in the Liquid Staking Derivatives (LSD) market.
  • Lido Finance’s native token (LDO) has pumped over 20% in the last 24 hours.

Liquid staking protocol Lido Finance has become the biggest DeFi protocol by total value locked (TVL), with over $5.95 billion staked in the protocol, according to Defillama. The closest competitor to the protocol in TVL is Maker (MKR) at $5.91 billion, followed by Aave (AAVE) at $3.74 billion. Lido Finance has seen its token (LDO) price appreciate over 20% to $1.16 in the last 24 hours. 

Lido Finance’s Dominance

Lido Finance allows its users to obtain exposure to the Ethereum staking process without committing the minimum 32 ETH otherwise required. Since the Ethereum Merge, the demand for liquid staking protocols has significantly increased, as per a report by Nansen. ETH’s transition to Proof-of-Stake architecture has allowed for a native yield-bearing instrument whose demand has outpaced any other crypto yield-bearing assets. 

Liquid staking balances time series ETH2 chart

Source: Dune Analytics

As of January 2nd, Lido Finance has $5.8 billion staked in Ethereum (ETH), $25.8 million in Solana (SOL), $45.2 million in Polygon (MATIC), $10.9 million in Polkadot (DOT) and $2.2 in Kusama (KSM). Among the other liquid staking protocols in the space, Lido has the majority share, followed by Coinbase and Rocketpool. 

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With the Beacon Chain withdrawals expected to go live this year with the Shanghai upgrade, the demand for liquid staking protocols will remain high as users seek out different ways to earn yield. 

On the Flipside

  • The growth of Lido Finance depends on the adoption of the Ethereum Network. If there is any vulnerability in the Ethereum blockchain or any problem with a future upgrade of the network, it will negatively impact Lido Finance’s price and TVL. 

Why You Should Care

Liquid staking solutions allow stakers to benefit from immediate liquidity and composability of staked assets. It allows users to stake and unstake any amount of ETH without locking them up for a long time.  

Other updates on Lido Finance: 

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This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
Arjun Mukherjee

Arjun is an analyst and a writer who has been a part of the crypto space since 2017. His primary area of interest is defi and scaling solutions, and likes to read about new protocols in his free time.