• Ethereum’s Beacon Chain has been powering the liquid staking industry, which has seen a 20-40% increase in TVL over the past month.
• The top three liquid staking protocols in terms of TVL are Lido, Coinbase, and Rocket Pool.
• Liquid staking offers users rewards while retaining their asset liquidity, with the shorter staking window allowing for strategies to capitalize on market trends.
Liquid Staking Industry Booming on Ethereum
The liquid staking industry has been thriving on the Ethereum (ETH) network since its introduction of the Beacon chain. As of Feb. 9, the total value locked (TVL) in three top Ethereum-based liquid staking protocols had risen above $11b, with Lido (LDO), Coinbase (COIN), and Rocket Pool (RPL) all recording gains in the 20-40% range over the past month according to DeFi LIama.
Benefits of Liquid Staking
Liquid staking is an automated process that allows users to stake their ETH on the Beacon chain, a proof of stake blockchain. It provides users with rewards when they stake their tokens but also enables them to move their assets around while still being able to benefit from rewards. This enhances overall liquidity as well as giving investors more flexibility when it comes to capitalizing on market trends due to its shorter staking window.
Leaders In The Space
Lido currently controls 27.5% of all liquid stakings and boasts a total locked value (TVL) of around $8.39b as per Gnosis co-founder Martin Köppelmann’s survey; followed by Coinbase at 14.5%, with $1.77b in wrapped ETH according to CoinMarketCap data for Feb 9th 2021 . Meanwhile, Rocket Pool and Frax Ether have seen the biggest gains out of the top five projects over the last month at 40% and 97%, respectively.
Coinbase Ventures Joining Oracle DAO
Coinbase Ventures recently announced that they would join Rocket Pool’s Oracle DAO which sparked a debate about whether Ethereum is becoming too centralized or not; with Bitcoin maximalists arguing that this proves so. According to CoinMarketCap data for Feb 9th 2021 , Lido registered 17% gain over 7 days taking its price up to $2.71 with a market cap of $2 billion making it 30th largest crypto by market cap while Rocket pool registered 11%.
Overall this shows that Liquid Staking Protocols are surging due to its ability provide users rewards along with maintaining asset liquidity while offering flexibility through its shorter staking windows enabling investors capitalize on market trends effectively resulting in higher returns for them leading these protocols gaining popularity amongst other cryptocurrencies thus driving up their prices significantly