Aaryamann Shrivastava
FXStreet
- Liquid Staking protocols collectively are worth more than $21 billion, while DEXes only have some $18 billion locked on them.
- These protocols, led by Lido DAO, took off following the Ethereum Shapella upgrade, which enabled ETH staking withdrawal.
- Interestingly DEXes are not even holding the second spot as that is controlled by Lending protocols leading by $60 million.
The Decentralized Finance (DeFi) market had been the domain of Decentralized Exchanges (DEXes) for the longest time. The sudden emergence of Liquid Staking protocols, on the other hand, took the entire market by surprise as it not only grew immensely but also successfully managed to dethrone the DEX category from the top spot.
Liquid Staking is the new king of the DeFi market
Liquid Staking protocols saw a resurgence this year after the hype regarding the Ethereum Shanghai hardfork began impacting the market. So much so that year to date, protocols in this category have collectively noted a 147% increase in the total value locked (TVL) in them. Up from $8.8 billion at the beginning of the year, today, Liquid Staking protocols have over $21.8 billion locked on them.
DeFi market TVL distribution
This was enough to push DEXes out of the top spot, a position this category had dominated since November 2020. While Yield generating and Lending protocol at some points throughout the past two and a half years did attempt to take over, they ended up failing to do so. But Liquid Staking protocols success was all thanks to the Ethereum Shanghai hardfork, which enabled staking withdrawal. This boosted the overall confidence of investors in regard to staking.
However, even within the Liquid Staking market, most of the money locked is dominated by one protocol - Lido. The staking protocol is not only the biggest in its category, with a TVL of $14.88 billion, but the biggest Dapp in the entire market, surpassing and dethroning Aave, which has a TVL half of Lido - $6.11 billion.
Interestingly, at the time of writing, DEXes are not even the second biggest category of protocols in the DeFi market. That spot is held by Lending protocols which surpassed decentralized exchanges by some $60 million.
Top three DeFi protocol categories and their TVL
The broader market bearish conditions have been a contributing factor to these changes as investors have been attempting to make the most of their assets. Thus investing them in yield-generating protocols is a far better option than just leaving them on exchanges. Hence the funds shifted from DEXes to Liquid Staking and Lending protocols.
Like this article? Help us with some feedback by answering this survey:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Is Altcoin Season here as Bitcoin reaches a new all-time high?
Bitcoin reaches a new all-time high of $98,384 on Thursday, with altcoins following the suit. Reports highlight that the recent surge in altcoins was fueled by the victory of crypto-friendly candidate Donal Trump in the US presidential election.
Shanghai court confirms legal recognition of crypto ownership
A Shanghai court has confirmed that owning digital assets, including Bitcoin, is legal under Chinese law. Judge Sun Jie of the Shanghai Songjiang People’s Court shared this opinion through the WeChat account of the Shanghai High People’s Court.
BTC hits an all-time high above $97,850, inches away from the $100K mark
Bitcoin hit a new all-time high of $97,852 on Thursday, and the technical outlook suggests a possible continuation of the rally to $100,000. BTC futures have surged past the $100,000 price mark on Deribit, and Lookonchain data shows whales are accumulating.
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange
Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.
Bitcoin: New high of $100K or correction to $78K?
Bitcoin surged to a new all-time high of $93,265 in the first half of the week, followed by a slight decline in the latter half. Reports highlight that Bitcoin’s current level is still not overvalued and could target levels above $100,000 in the coming weeks.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.