The decentralized finance (DeFi) ecosystem has continued to grow despite the broad bearish trends. The latest of its products seeing uptrends is liquid staking. Liquid staking currently holds a total value locked (TVL) of $14 billion, placing it as DeFi’s second-largest product, as shown on the aggregator platform, DeFiLlama.
What Is Liquid Staking?
Generally, crypto staking is a feature that enables investors to earn passive income by dedicating their crypto assets to a blockchain network over a specific period. During the lockup period, investors cannot use their staked assets for other trading activities.
On the other hand, liquid staking introduces flexibility to the staking feature. It allows users to stake their crypto assets and still use a representation of their staked assets for other DeFi products, such as lending and trading. These staked asset representations are liquid staking derivatives tokens.
Liquid Staking TVL Hits $14B
DeFiLlama revealed that 71 liquid staking protocols hold a combined TVL of $14 billion. The increase brought the liquid staking product became second only to the decentralized exchange (DEX) market. DEXes records a combined TVL of $19.33 billion.
The uptrend for liquid staking brought it above the lending field, which has a TVL of $13.7 billion. Note that the lending field used to hold the second-largest position on the list of DeFi’s products.
Lido Takes the Lead
Lido, a liquid staking solution, ranks first on the list of leading protocols offering liquid staking. It held a TVL of $9.32 billion, representing over 66% of the total TVL for the flexible staking feature. Lido offers its services to users across Ethereum, Solana, Kusama, Polygon, and Polkadot.
Lido’s recent boost could be attributed to big buy action by Tron network’s founder, Justin Sun. He had staked $144 million worth of ETH on Lido earlier today, trailing the several millions of dollars he had deposited over the weekend into the protocol.
Last Friday, the Tron boss had staked $240 million worth 150,100 ETH on the Lido protocol. This means that Sun now has staked ETH (stETH) equal to the amount staked on the protocol to perform other trading activities.
