Total value locked (TVL) in the liquid staking protocols sector exceeded that of the decentralized crypto exchange (DEX) sector.
The dollar value of all cryptocurrencies locked within smart contracts of decentralized liquid staking protocols exceeded that of DEXs by $250 million by the end of April, according to DefiLlama. On-chain statistics show that over the past two weeks, DEXs’ TVL declined by $1.66 billion, while funds locked in liquid staking protocols increased by $280 million.
As of May 2, 2023, DEXs have $17.13 billion in TVL, and liquid staking has $17.38 billion in TVL. Yet, there are 820 projects operating in the DEX sector, while there are 85 protocols operating in the liquid staking sector. The largest of these by TVL are:
- Lido — $11.54 billion;
- Coinbase Wrapped Staked ETH — $2.19 billion;
- Rocket Pool — $1.46 billion.
Liquid staking protocols allow crypto market participants to place digital assets in liquidity pools, where these funds are used to support decentralized trading, lending, and market stability. In return, participants receive tokens representing their share of the pool and earn a percentage of commissions and fees.
Lido, the sector leader, is the largest Ethereum staking protocol. In total, the protocol’s smart contract has over 6.2 million ETH locked, worth 98% of the protocol’s TVL. Since the beginning of 2023, Lido’s smart contract has seen a more than two-fold increase in TVL. The growth in popularity of the protocol and the sphere as a whole is most likely due to Ethereum’s successful transition to PoS last September and a recent Shapella update, which activated the ability to withdraw staked ETH.
