Lido deposits surpass $12 billion as Ethereum's Shapella boosts liquid staking
Liquid staking, offered by Lido and other protocols, is a popular method that streamlines user deposits and stakes on Ethereum. Users receive a derivative token as proof of their deposit, which can be used as collateral within the DeFi ecosystem, enabling them to earn additional yields beyond what Ethereum staking alone provides., enabled last week, allows for proof-of-stake withdrawals on the Ethereum network.
"Liquid staking is poised to benefit the most from the Ethereum Shapella upgrade. Liquid staked tokens offer greater capital efficiency and flexibility compared to staked tokens, as traders can earn staking rewards while retaining the ability to move their funds freely," said Charmyn Ho, Head of Crypto Insights at crypto exchange Bybit.As the staking landscape evolves, an increasing number of users prefer staking providers over operating their own validator nodes.
This is due to the complexity and costs associated with running a validator node, which requires a minimum stake of 32 ETH . "It's likely that some people will transition to liquid staking in which they control they ETH, as it also facilitates lower requirements below the minimum of 32 ether," said Robert Ellison, chief growth officer at Allnodes, a node hosting and staking platform."This [Shapella] update opens the door to new markets that have been hesitant to get involved, which supports the network and liquid staking.
Lido commands a significant position in the liquid staking derivative market, holding approximately 30% of the market share, according to© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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