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Liquid staking solutions such as Lido and Rocket Pool now have a higher total value locked (TVL) than decentralized exchanges (DEXs), making them the top category of DeFi protocols, according to cryptocurrency analytics platform DefiLlama.
For the first time, the Liquid Staking category has surpassed DEXes in total value locked, making it the leading category in DeFi by TVL dominance pic.twitter.com/HQ0Ug8UweR
— DefiLlama.com (@DefiLlama) April 26, 2023
TVL is a metric that measures the dollar value of all cryptocurrencies locked in the protocol’s smart contracts.
Liquid staking protocols have recently taken the top spot. As of April 13, only $17.19 billion of cryptocurrencies were locked in liquidity contracts, compared to $18.89 billion in DEX, according to archived information. However, DEXs experienced a $1.66 billion decline to $17.2 billion, while liquid staking solutions rose $280 million to $17.47 billion, giving them the top spot.
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Liquid staking protocols are staking pools that stake cryptocurrencies on behalf of users. These protocols also issue tokens to users, which represent a person’s deposited cryptocurrency. Since these tokens can be used in DeFi applications, liquid staking protocols allow users to simultaneously stake their coins and use them in other applications.
Lido (stETH) is still the leading betting protocol with $11.54 billion worth of crypto locked in its contracts, according to DefiLlama data as of May 1st. Coinbase Wrapped Staked Ether (CBETH) is in second place with $2.19 billion locked up and Rocket Pool (rETH) is in third place with $1.46 billion. The rest of the protocols have less than $1 billion TVL each, but collectively add up to $2.22 billion.
Lido was the first liquid staking protocol to launch in 2020. Liquid staking has become more popular as Ethereum moved to proof of stake and allowed withdrawals.