Lido Finance Reaches 1M Validators, Boosts DeFi Growth

Lido, the prominent liquid staking platform, holds 28.5% of all staked Ether, establishing itself as a leader in DeFi.

Apr 30, 2024 - 14:44
May 2, 2024 - 13:56
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Lido Finance Reaches 1M Validators, Boosts DeFi Growth
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Lido, a prominent liquid staking platform, holds a substantial 28.5% share of all staked Ether, firmly establishing itself as a leader in the DeFi sector.

Recently, Lido Finance achieved a significant milestone by reaching one million Ethereum validators, reinforcing its position as the largest decentralized finance (DeFi) protocol. Lido Finance shared this achievement in a post on X dated April 29th.

Liquid staking platforms like Lido Finance play a crucial role in making staking accessible to retail users with limited capital. Without platforms like Lido, these users would typically need 32 Ether (ETH), valued at $3,160, to set up their validator nodes on Ethereum.

Data from Dune reveals that Lido Finance controls a significant portion (28.5%) of staked Ether, with an additional 13.6% stake through the Coinbase exchange, amounting to over 27% of the entire Ether supply currently staked.

The appeal of liquid staking protocols like Lido lies in their ability to offer liquidity benefits to users. By staking Ether with Lido, users receive Lido Staked ETH (stETH) in return, which can be used in various DeFi protocols. This differs from traditional staking, where staked tokens remain locked for the staking period.

The surge in popularity of liquid staking protocols has greatly contributed to the growth of the DeFi sector. Total value locked (TVL) in DeFi protocols has surged from $36 billion in Q4 2023 to a peak of $97 billion in Q1 2024, currently standing at $92.32 billion, according to DefiLlama.

This remarkable growth in DeFi TVL, up by 65.6% quarter-on-quarter, is largely attributed to the success of liquid staking protocols like Lido, as highlighted by on-chain intelligence provider Messari.

Overall, liquid staking protocols hold a substantial $47.7 billion in cumulative TVL, with Lido leading at $29.9 billion, followed by Rocket Pool with $3.86 billion, according to DefiLlama.

Despite its success, concerns have arisen regarding Lido's increasing dominance. Ethereum co-founder Vitalik Buterin previously cautioned about potential centralization risks associated with Lido in a September 2023 blog post.