- Assets held in liquid staking services increased by a remarkable 292% to $20 billion.
- Ethereum adopted liquid staking as part of network updates during the past year.
Bloomberg says that one subset of the crypto industry, ‘liquid staking,’ has seen a stunning revival, almost reaching its all-time high. Assets held in liquid staking services increased by a remarkable 292% to $20 billion, recovering from a crisis in June 2022, when the larger digital-asset market was in an extensive decline.
Due to this meteoric rise, liquid staking has surpassed lending as the most important use case in DeFi. When the TerraUSD stablecoin failed and the crypto market dropped by $2 trillion in value, liquid staking providers like Lido and Rocket Pool saw their asset values drop from a high of over $21 billion in April of the previous year.
Liquid Staking Protocols
Although the liquid staking industry has been on the rise, the prices of key tokens and interest in the majority of DeFi services are still much lower than their respective records established in 2021 and 2022, according to Bloomberg.
Since Ethereum adopted liquid staking as part of network updates during the past year, its popularity has skyrocketed. Token holders that validate transactions on the Ethereum network now get a bonus of 4% in equivalent each year. Competing blockchains such as Solana and Cardano now also provide a stake for rewards.
Direct participation in staking often requires high-level computing expertise, expensive gear, and large financial outlays. However, the procedure has been made easier by the introduction of liquid staking protocols, which accept lesser commitments and provide users with a version of the pledged coins that may be used in other transactions.
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