The demand for Ethereum [ETH] staking increased as the Shanghai Upgrade drew nearer. 15% of the total quantity of Ethereum, according to a tweet from Lido [LDO] on April 2nd, was being staked.
This enthusiasm for Ethereum staking had a good effect on the Liquid Staking Derivative (LSD) market. LSDs are financial tools that give investors the ability to keep the earning potential of their staked assets while retaining liquidity.
They give token owners the option to sell their staked assets while still allowing them to take part in a variety of DeFi applications and earn dividends.
LSDs have surpassed many sectors in the DeFi area, according to analyst Dynamo Patrick, and have managed to rank second in terms of deposits made in the sector. They have grown in popularity in the crypto world.
Lido, Frax Finance, and Rocket Pool are a few well-known LSDs in the cryptocurrency world. The vast bulk of the ETH that has been staked has been deposited using Lido. Data from Dune Analytics shows that the protocol has been used to deposit 31.4% of all staked ETH. The protocol has experienced a sharp increase in TVL over the past few months as a result of Lido’s supremacy.
Additionally, over the previous month, Lido’s income climbed by 22.1%. The increasing daily activity on the protocol would be the primary cause of the increase in network income. Lido won’t be the only protocol affected by the interest in staking, though; other protocols like Frax Finance and Rocket Pool also had a chance to gain from the focus on LSDs.
As a result, interest in each protocol’s token, LDO, RPL, and FRAX, has begun to increase. Investors and traders alike are purchasing these protocols’ tokens in order to gain access to the interest being created by staking. The increasing market capitalization of each of these coins over the past several days serves as evidence of this. Time will tell if there will still be interest in these tokens after the Shanghai Hardfork.