The Liquidity Staking Protocol, Lido Finance seems to have benefited immensely from the Ethereum Merge in September 2022 with its Total Value Locked (TVL) hitting the top position among other popular Decentralized Finance (DeFi) protocols.
The reports from DeFiLama demonstrate that Lido’s liquid staking protocol now owns $5.9 billion in TVL compared to Maker DAO and AAVE with $5.89 billion and $3.7 billion in TVL respectively.
Alongside, according to Lido’s finance as on January 2, 2023, Lido had staked $5.8 billion in Ether, $23.2 million in Solana, $43.9 million in Polygon, $11 million in Polkadot and $2.2 million in Kusama.
In December, the Blockchain Data Analytics from Nansen indicated that staking solutions had been in great demand since the Ethereum Merge where Ethereum was shifted to Proof–of–Stake (PoS). As a result, the introduction of staked ETH as a native yield–bearing instrument outstripped other collateralized yield–bearing services.
Thereupon, the Lido model provides users access to liquid Ether staking without relying on the traditional 32 ETH today, As a result, Lido has benefited in terms of earning free revenue which has been directly proportional to Ethereum PoS earnings due to its staking protocol.
However, on the other hand, Maker DAO saw its revenue decline by more than $ 4 million in Q3 of 2022 which is a plunge of 86% as compared to the previous quarter. The experts cite liquidations and weak loan demand as the prime reason for this decline. On contrary, the Lido showed progressive signs and held the most amount of staked ETH. It held 31% of Staked ETH amongst all DeFi.
This staking figure is huge when compared with major crypto exchanges such as Kraken and Coinbase with present staking rates of 8.5% and 15% respectively.