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Liquid staking solutions like Lido and Rocket Pool have now surpassed decentralized exchanges (DEXs) in total value locked (TVL), positioning them as the leading category of DeFi protocols, as reported by the crypto analytics platform DefiLlama.
This marks the first occasion that the Liquid Staking category has outpaced DEXes in total value locked, establishing it as the dominant category in DeFi by TVL metrics pic.twitter.com/HQ0Ug8UweR
— DefiLlama.com (@DefiLlama) April 26, 2023
TVL serves as a measure of the dollar value of all cryptocurrencies secured within a protocol’s smart contracts.
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Recently, liquid staking protocols have claimed the leading position. On April 13, there was $17.19 billion in crypto locked within liquid staking contracts, while DEXs held $18.89 billion, based on archived data. However, DEXs have seen a decline of $1.66 billion to $17.2 billion, whereas liquid staking solutions have gained $280 million, reaching $17.47 billion, thus taking the top position.
Related: Podcaster apologizes for spreading Lido rumor
Liquid staking protocols function as staking pools that stake cryptocurrencies on behalf of users. These protocols also provide tokens to users that represent their deposited cryptocurrencies. Since these tokens can be utilized in DeFi applications, liquid staking protocols enable users to stake their coins while simultaneously using them in other platforms.
As per DefiLlama’s data from May 1, Lido (stETH) remains the leading staking protocol with $11.54 billion of cryptocurrency locked in its contracts. Coinbase Wrapped Staked Ether (CBETH) follows in second place with $2.19 billion locked, and Rocket Pool (rETH) ranks third with $1.46 billion. The other protocols each have less than $1 billion in TVL but collectively amount to $2.22 billion.
Lido was the inaugural liquid staking protocol, launching in 2020. The popularity of liquid staking has surged as Ethereum transitioned to proof-of-stake and enabled withdrawals.
