Lido Finance, the largest decentralized finance (DeFi) protocol on the Ethereum network, has achieved a significant milestone by surpassing one million validators. This achievement solidifies Lido’s position as a leading liquid staking protocol, making staking on Ethereum more accessible and accelerating the staking mechanism.
Lido Finance announced this milestone on April 29, revealing that it now has over one million validators on the Ethereum network. Liquid staking protocols like Lido play a crucial role in simplifying staking for individual users who may not have the substantial capital required to run their own validator nodes on Ethereum.
According to data from Dune, Lido Finance currently represents 28.5% of the total ETH staked, indicating that more than 27% of the total Ethereum supply is staked on the network. Notably, major exchanges like Coinbase also support Lido, accounting for a 13.6% share.
Liquid staking protocols are experiencing rapid growth due to the liquidity advantages they offer users. With Lido, users can stake their ETH and receive staked ETH (stETH) in return, which can also be utilized in other DeFi protocols. In traditional staking, tokens remain locked and unusable for the duration of the stake.
The growth of the DeFi ecosystem is continuing to rise, largely influenced by key players like liquid staking protocols. Lido holds a significant share in the total value locked (TVL) of DeFi. According to DeFiLlama, liquid staking protocols have surpassed a total TVL of $47.7 billion, with Lido leading at $29.9 billion.
However, this rapid growth also raises concerns. Leading crypto founders have expressed worries about the increasing dominance of protocols like Lido. Ethereum co-founder Vitalik Buterin has previously highlighted the potential centralization risks and the dangers of a single stake token gaining control over the network.
In light of these concerns, it is crucial for protocols like Lido to take appropriate measures. Creating a diversified and resilient structure is essential for the healthy growth of the DeFi ecosystem.
Disclaimer: The information provided in this article should not be considered investment advice. Investors should be aware of the high volatility and risks associated with cryptocurrencies and conduct their own research.
