📰 Table Of Contents
Lido Finance Reaches Major Milestone
Reaching a major milestone, Lido Finance, the leading liquid staking protocol on Ethereum, now controls over 28.5% of all staked Ether, raising questions about the potential of DeFi to challenge traditional finance (TradFi).
Lido Finance Emerges as the Largest DeFi Protocol
The April 29 achievement establishes Lido Finance as the largest decentralized finance (DeFi) protocol, boasting one million Ethereum validators and surpassing major players like Coinbase exchange, which holds 13.6% of staked Ether, according to Dune.
Advantages of Liquid Staking Protocols
This surge in popularity can be attributed to the unique advantages liquid staking protocols like Lido offer users. Users who stake their Ether with Lido receive the staked ETH (stETH) in return.
Liquid Staking Fueling the Rise of DeFi
In the last quarter, the Total Value Locked (TVL) in Decentralized Finance (DeFi) increased by 65.6%, surging from a low of 436 billion in Q4 of 2023 to $97 billion in Q1 of 2024. Currently, the price of DeFi TVL sits at $92.17 billion, according to DefiLlama.
Lido Leading in TVL Growth
Ethereum’s TVL growth of nearly 71% played a major role, primarily fueled by asset price increases and the practice of liquid restaking. The total value locked (TVL) in liquid staking protocols has reached an impressive $47.7 billion, with Lido leading the pack by securing over $29.9 billion of that amount.
Concerns Regarding Lido Validators and Centralization
Crypto founders have recently voiced their worries about Lido’s growing dominance. If a single staking token, like Lido’s stETH, becomes dominant under the DAO model, it creates a centralized point of control that is potentially vulnerable to attacks and governs a substantial portion of all Ethereum Lido validators. Ethereum Co-Founder Vitalik Buterin has previously pointed out the potential centralization risks with Lido.
Ian is a cryptocurrency enthusiast blending humor with professionalism. With an engineering background and a storyteller's heart, he simplifies the blockchain world with sharp analysis and a touch of wit. At Cryptowire, he brings his unique perspective to make digital financial innovation accessible to all.
