With great interest from the community, liquid staking is becoming the second largest DeFi section. The Shanghai upgrade of Ethereum due next month was expected to kindle activity in liquid staking, which allows investors to earn interest on their digital currencies while also keeping the assets for other purposes via derivative tokens. Here are some of the most liquid staking platforms now.
Lido Finance (LDO)
Built in 2020, Lido soon saw problems with Ethereum after upgrading to Ethereum 2.0. After The Merge, Lido has shown its influence when it becomes the largest DeFi protocol in terms of total value locked as liquid staking gains momentum. From January 2023 to the time of writing, TVL on Lido has increased by more than 37.2% (from $5.88B to $8.02B).
Lido lets users stake ETH and receive staked ETH (stETH) in return so that they can use stETH in other protocols for other purposes. Currently, Lido Finance accounts for nearly 30% of the total amount of staked ETH and becomes the largest liquid staking platform on the Ethereum network. According to data from Coingecko, $LDO is ranked 36 in terms of market capitalization, with the number of tokens circulating in the market accounting for more than 83.7% and daily trading volume of 20 million USD excluding times of market volatility.
Rocket Pool (RPL)
Established in 2016, Rocket Pool (RPL) provides Ethereum staking services that allows users to use DeFi applications (dApps). Besides staking services, Rocket Pool also lets users become node operators to receive rewards generated from other staking users on nodes. These nodes include those who participate in Rocket Pool and hold RPL in the blockchain community. In January 2023 alone, Rocket Pool’s TVL had nearly doubled (from $500M to more than $900M).
Frax Finance (FXS)
Frax Finance is the first algorithmic stablecoin protocol that is partially backed by collateral. The Frax ecosystem has 2 stablecoins: FRAX (pegged to the US dollar) & FPI (pegged to the US Consumer Price Index). The Frax Finance economy is composed primarily of the two stablecoins, a native AMM (Fraxswap), and a lending facility (Fraxlend).
FRAX can be minted and redeemed for $1 worth of collateral and the governance (FXS) token at the collateral ratio. To mint $1 FRAX, users must have the corresponding asset worth 1$ on the protocol.
StarFi (FIS)
Stafi is a combination of Staking and Finance. Users can stake PoS tokens through StaFi and receive rTokens issued on StaFi chain in return, available for trading while still earning staking rewards. In addition, users can mint rToken through Staking Contract. rTokens will be minted and sent to your designated wallet address according to the amount of the native tokens you Stake and the exchange rate of rToken. rToken will be destroyed when the investor buys back the original token. Of course, it is also possible to sell rToken on the exchange or hold rToken to receive staking rewards.
StakeWise (SWISE)
StakeWise is an Ethereum 2.0 staking service that strives to achieve the highest possible yield for users.
StakeWise Pool is a network of validators created and operated by StakeWise on behalf of stakers using ETH deposited into the Pool. ETH deposited in the pool will be converted to sETH2 and distributed daily rewards to users. Like other LSD platforms, Starwise allows users to use derivative tokens to participate in other activities to increase profits. Market capitalization of StakeWise (SWISE) is $41,804,925 and is ranked #521 on CoinGecko today.