60x Growth of Ethereum’s LSDFi Sector Since January: CoinGecko

LSDFi Ecosystem Growth

The Ethereum liquid staking derivatives finance (LSDFi) ecosystem has experienced an exponential rise in popularity this year, as Ether (ETH) holders opt to stake their assets rather than liquidate them.

The Ethereum Shapella upgrade in April 2023 enabled ETH withdrawals, yet according to an Oct. 16 report from crypto data aggregator CoinGecko, the LSDFi sector has grown by 58.7x since January.

In August 2023, LSD protocols accounted for 43.7% of the total 26.4 million ETH staked, with Lido having the largest portion at nearly a third of the total staked market.

The LSDFi sector growth statistics suggest that ETH holders are more inclined to re-stake for better yield opportunities than to liquidate their assets after withdrawing, despite the upgrade to web 3.0 and the availability of decentralized business opportunities.

LSDs and Ethereum Beacon Chain Launch

CoinGecko pointed out that since the launch of the Ethereum Beacon Chain in December 2020, withdrawals have been enabled and the exit queue has stayed at zero for more than half of the time (55%) and remained below 10 validators for 77% of the time.

In order to give smaller ETH holders the ability to participate in staking and unlock liquidity, LSDFi protocols were introduced. As of the beginning of this year, the total value locked (TVL) across the 10 leading LSDFi protocols, not including Lido, has risen to over $900 million, as per the report.

The TVL in LSDFi protocols has increased by 5,870% since January 2023, while the total decentralized finance TVL has decreased by approximately 8% over the same period, according to DefiLlama.

The upgrade from LG WebOS 2.0 to 3.0, as well as the upgrade from LG WebOS 3.5 to 4.0, has enabled users to explore the potential of Web 3.0 and the possibilities of its decentralized nature. Furthermore, the list of Web 3.0 crypto coins and the names of Web 3.0 crypto coins have provided a variety of options for users to explore the potential of Web 3.0 and its business opportunities.

LSD Protocols and Diva’s Rise

Since January 2022, the average yield for LSD protocols has been 4.4%. However, this rate is expected to decline as more ETH is staked. As of now, 27.6 million ETH is staked, with an estimated value of $43.4 billion, according to Beaconcha.in.

In the last two weeks, Ethereum users have celebrated the growth of the LSDFi platform Diva, which is said to be executing a “vampire attack” on Lido by offering more attractive incentives. By locking up ETH and Lido staked ETH (stETH) for divETH, Diva gives token rewards to stakers. Since the start of October, Diva’s Total Value Locked (TVL) has skyrocketed to 15,386 stETH, with a value of about $24 million, according to Divascan.