In the last 24 hours, the Lido protocol has become the leading protocol in the decentralised finance (DeFi) ecosystem in terms of total locked value (TVL) after beating MakerDAO (MKR). As a result, nearly $6 billion worth of Ethers (ETH) are currently stored on the liquid staking platform.
Lido, now the first DeFi protocol
The decentralised finance (DeFi) protocol Lido has just overtaken MakerDAO (MKR) in terms of total locked value (TVL), becoming the leading DeFi protocol in the ecosystem on this metric. As a result, Lido now has more than 15% of the total locked value in the DeFi ecosystem.
Lido is what is known as a liquid staking protocol, a method that allows users to deposit and lock in a cryptocurrency in exchange for its equivalent in order to take advantage of DeFi. For example, Lido is commonly used to deposit Ether (ETH) in exchange for stETH (for Lido Staked ETH).
This is a relatively democratised technique within decentralised finance that allows one to maximise the speculative aspect of one’s assets, and de facto vary one’s exposure.
Thus, according to Dune Analytics, Lido is by far the first staking protocol concerning Ether, ahead of the main exchanges such as Coinbase, Kraken or Binance :
Although Lido supports various networks, including Solana (SOL), Polygon (MATIC), Polkadot (DOT) and Kusama (KSM), this protocol is mainly used for Ethereum staking, a feature that has been particularly popular since the blockchain’s transition to Proof-of-Stake (PoS). As proof of this success, at the time of writing, approximately 5.9 billion dollars worth of ETH are being staked on Lido.
As a result, the price of Lido’s utility token, the LDO, has risen by 15.7% over 24 hours. It is currently trading at $1.16, which is still well below its peak price (ATH) of $7.30 in August 2021.