Liquid Staking Brief

Key Insights

• Lido has surged to prominence in the liquid staking arena, capturing a significant 32.2% market share of all staked ETH. With TVL hitting a cumulative all-time high of $22 billion, and the supply of its stETH token rivaling wETH, Lido's increasing influence raises critical concerns around decentralization and the broader health of the Ethereum ecosystem.
• Despite 70% of SOL currently being staked, only a small fraction (less than 3%) is committed to liquid staking protocols, but Marinade and Jito are gaining traction.
• Stride, a leading liquid staking protocol in the Cosmos ecosystem, is in preliminary discussions about a potential merger with the Cosmos Hub. This would involve a radical step of converting Stride’s STRD governance token to Cosmos' ATOM, with aims of bolstering decentralization and security within the Cosmos ecosystem.

Bear markets often expunge nefarious builders, risky capital allocators, and petulant CEOs. While human actors are most visible, DeFi protocols face similar fates. As market participants diminish, the inherent reliance on user engagement and liquidity tightens, leading to reduced network activity.