• Liquid staking platforms on Ethereum are surging in popularity, with the total value locked (TVL) in three top protocols rising above $11b.
• The Beacon Chain offers users the advantage of liquidity and a shorter staking window to capitalize on market trends.
• Coinbase and Rocket Pool have been making waves in the industry and Lido currently controls 27.5% of staking, while Coinbase is in second place at 14.5%.
DeFi TVL Leader-board: Ethereum’s Liquidity Staking Platforms Surge
What is Liquid Staking?
Liquid staking is an automated process that allows users to stake their ETH on the Beacon chain, a proof of stake blockchain. Rewards are earned when tokens are staked, but unlike traditional staking, users can move their assets around while still earning rewards. This allows them to maintain liquidity for better platform security and more rapidly switch up strategies based on market trends due to its shorter staking window.
Current Market Leaders
As of Feb 9th, 2021, the total value locked (TVL) in three top Ethereum-based liquid staking protocols had risen above $11 billion USD. Lido (LDO) has the highest TVL out of all liquid staking platforms, at around $8.39 billion USD followed by Coinbase (COIN) at $1.77 billion USD and Rocket Pool (RPL) with a gain in the 20-40% range over the past month according to DeFi LIama data. Frax Ether also saw an impressive 97% increase over the past month.
Coinbase Ventures Involvement
Coinbase Ventures recently announced they would join Rocket Pool’s Oracle DAO which sparked debate about whether Ethereum was becoming too centralized due to Bitcoin maximalists pointing out that this showed so. While this is still up for debate it does show that these two companies are looking for ways to collaborate within this space which could lead to further innovation down the line if successful partnerships develop between them or other players within this space as well as outside entities such as banks or governments looking into utilizing blockchain technology for specific use cases such as digital identity or asset management solutions within a permissioned network environment such as Hyperledger Fabric or R3’s Corda platform where access can be more tightly controlled than public blockchains like Ethereum where anyone can participate after downloading their client software from github and setting up their own full node validator instance etcetera…
Price Action Analysis
When looking at price action of Lido and Rocket Pool on CoinMarketCap we can see volatility with Lido registering a 17% gain over 7 days taking its price to 2.71 USD with a market cap of 2.27 Billion US Dollars making it 30th largest crypto by market cap while Rocket Pools 3-month chart shows similar volatility albeit not quite reaching those same heights yet but showing some promise nonetheless should these gains continue into March 2021 and beyond….