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- No other protocol comes close to Lido’s TVL numbers.
- The project is touted as the future of DeFi.
Out of the top 10 DeFi protocols, Lido Finance [LDO] had the highest capital inflows in terms of blocked assets, DefiLlama revealed. Using the Total Value Locked (TVL) metric, the blockchain aggregator showed that Lido had inflows of $1.58 billion over the past seven days.
Top 10 DeFi protocols with the highest USD increase in TVL in the past week pic.twitter.com/KonQ0LkcSl
— DefiLlama.com (@DefiLlama) November 25, 2023
Other projects including MakerDAO [MKR]And Aaf [AAVE], were nowhere near Lido’s numbers. The increase in Lido’s TVL meant that the protocol was able to attract much more capital than the others.
It is liquid deployment over lending
The increase also means that market participants involved in providing liquidity have enough confidence in Lido to offer better returns than the others. One reason for the increase was the increase in demand for liquid staking.
Liquid staking allows market participants to participate in staking while having the flexibility to buy and sell the token. For Lido, its dominance in this space could have something to do with it Ethereums [ETH] decision to switch to Proof-of-Stake (PoS).
Since then, demand for Lido sETH has been increasing. steTH is the cryptocurrency that represents an Ethereum token deposited to support blockchain operations.
However, Lido is not the only project that offers liquids to expand Services. Rocket pool [RPL]which was also in the top 10 DeFi TVLs this week, does the same.
But Rocket Pool hasn’t been able to gain the same adoption as Lido. At the time of writing, Lido’s total TVL was $22.88 billion. Rocket Pool, second on the list of liquid staking protocols, had a TVL of $2.43 billion.
Source: Messari
To lead the future of DeFi?
However, it is noteworthy to mention that there was a widespread situation increase in liquid staking activities during the week. So while the projects topped the rankings, others had their own share of the deposits.
For Aave and Maker, whose foundations are built on lending, it could be difficult to top Lido’s run. This is because there have been many predictions that liquid staking now takes the pole position in the future of DeFi, mainly due to its numerous use cases.
Some use cases of liquid staking protocols include yield farming, stablecoins minting, and node running. In the case of Lido, a lot has also been invested in integration with other projects.
How many Worth 1,10,100 LDOs today?
In recent times, Lido has been integrated with the Terra Classic [LUNC] blockchain. Such moves could help the project take its place as a DeFi king.
If Lido continues to work on other partnerships, companies like Maker and Aave may have no choice but to give in to the project. At the same time, this does not mean that others cannot pull the strings to overturn the current position.