Lido Finance Now Has Highest TVL in DeFi Surpassing MakerDAO

  • Lido’s liquid staking protocol has a total market cap of $5.96 billion in TVL.
  • Lido finance had the largest portion of staked ETH among DeFi, at 31%.

Total value locked (TVL) for Lido Finance, one of several decentralized finance (DeFi) protocols, has risen to the top since the Ethereum merging in September. DeFiLlama reports that as of right now, Lido’s liquid staking protocol has a total market cap of $5.96 billion in TVL, which is more than both MakerDAO’s $5.91 billion and AAVE’s $3.26 billion.

By January 2nd, 5.8 billion Ether had been staked, according Lido Finance’s website. While Polkadot had $11 million staked, Kusama had $2.2 million, and Solana had $43.9 million.

Riding the Ethereum Merge

Lido’s methodology eliminates the need for users to put up the standard 32 ETH minimum to participate in liquid Ether staking. Since Ethereum has moved to proof-of-stake, staking solutions like these have been in great demand, according to data analytics conducted by Nansen on the blockchain in December.

Its research emphasized the Merge’s role in the introduction of staked ETH as a native cryptocurrency-native yield-bearing instrument that has swiftly outpaced other collateralized yield-bearing offerings.

Since Lido deposits every Ether it receives into the Ethereum Proof-of-stake (PoS) staking mechanism, it stands to gain from this arrangement. Lido said in November 2022 that it has been earning $1 million in fees daily since October 2022.

According to a statement released by Messari in September 2022, MakerDAO, the regulatory body of the Maker protocol, had its income drop to little over $4 million in Q3, an 86% collapse from the previous quarter, due to low liquidations and poor lending demand.

Moreover, according to Nansen in September, Lido had the largest portion of staked ETH among DeFi, at 31%. This is a substantial proportion compared to the 15% and 8.5% held by big crypto exchanges Coinbase and Kraken, respectively.

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