On Thursday, Lido Finance, the provider of liquid staking, became the largest DeFi protocol in terms of total locked value (TVL), a metric that tracks the amount of assets deposited in various DeFi projects. It will now be checked $19.4 billion in crypto at the time of writing.
Curve, a decentralized exchange focused on stablecoins, previously led this metric for about six months. Curve holds about now $19.28 billion and is just $120 million behind Lido, meaning the two rivals are neck and neck for now.
Other leading DeFi projects are next in the rankings, including Anchor Protocol, MakerDAO and Convex Finance with TVLs between $11 billion and $17 billion.
Understanding the rise of Lido
Today’s lead is indicative of Lido’s growing adoption as the leading avenue for liquid staking on blockchains like Ethereum, Terra, and Solana. Liquid staking is a process that allows users to delegate tokens to a staking service but hold the underlying value through derivative tokens.
Such a system is popular as it frees up user liquidity that can be further used in other DeFi protocols for additional returns. For example, on Ethereum, Lido users can deposit their ETH for Staked ETH (stETH), a derivative token representing staked assets with the appropriate value.
“What really strikes me is how popular stETH has become as collateral and for yield farming strategies,” said Andrew Thurman, content lead at blockchain analytics platform Nansen. “Investors are flocking to staking ether and its derivatives for its income potential and composability.”
Ethereum is just a blockchain for Lido Finance. The team also offers a liquid staking solution for LUNA, the native asset on the Terra blockchain. stLUNA is a token representing staked Luna in Lido and carries over to 7 billion dollars of the value of the log.
© 2022 The Block Crypto, Inc. All rights reserved. This article is for informational purposes only. It is not offered or intended to be relied upon as legal, tax, investment, financial or other advice.
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers
Comments are closed.