From Shanghai, liquid staking on Ethereum stands out

Glassnode observes a clear preference from consumers from staking Ethereum for liquid tokens. The stETH from Lido establishes his domination since the opening of theunstaking via update Shanghai.

In mid-April, a long-awaited update was rolled out on Ethereum. Since Shanghai, holders of ETH tokens in staking have been able to unlock them, i.e. make withdrawals. In plain English, Ethereum finalized its transition to proof-of-stake.

Glassnode notes that this functional novelty has, in particular, led to the emergence of a trend in staking. He observes a renewed interest for liquid staking tokenslike the stETH.

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Liquid staking tokens used for lending DeFi

Moreover, among staking liquid providerseLido” established a overwhelming domination “the report notes. Already the benchmark player, Lido ” consolidates its position on the market”. Another trend is emerging. This concerns DeFi’s integration of liquid staking tokens.

Liquidity pools associated with liquid staking have their value frozen. [Ndlr : TVL] decrease, as capital migrates to use as collateral in lending protocols.”

These various movements confirm that the introduction of withdrawals via Shanghai did not result in a unstaking massive. On the contrary, Glassnode notes, the update has led to a wave of new deposits.

A preference for liquid staking suppliers

This dynamic reflects stakers’ confidence “in the new flexibility” offered by Ethereum. Deposit activity peaked on June 2ndwith over 13,595 transactions representing more than 408,000 ETH.

Taking a closer look, we can isolate daily deposits by supplier, where a very clear trend in favor of liquid staking suppliers becomes evident, with Lido leading this trend.”

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It should be pointed out that Lido carried out an update on May 15, allowing node operators to withdraw staking ethers and holders of Lido’s stETH token to exchange it for ETH. The result:

400,000 stETH ($721 million) were redeemed, leading to a contraction in stETH supply. However, the huge wave of new ETH deposits more than offset the decline, pushing a new ATH of 7.49 million ETH.”

Lido dominant, but not winning over new users

From an accounting point of view, “Lido stands out as the undisputed industry leader”, comments Glassnode. Nevertheless, the rETHliquidity token of Rocketpoolhas grown three times faster than the Lido in 2023.

On the other hand, the increase in demand for stETH has not translated into an increase in the number of new token holders. Since Shanghai, however, this has been the trend for Rocketpool and FRAX tokens.

This leads us to the conclusion that many new deposits made via Lido are by existing stETH token holders who are increasing their exposure,” Glassnode concludes. Lido’s dominance could therefore be put into perspective.”

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