Ethereum’s largest decentralized finance (DeFi) protocol, Lido Finance, has achieved a significant milestone by surpassing one million validators. Lido has solidified its position as a leading liquid staking protocol, making staking on the Ethereum network more accessible and greatly speeding up the process.
Lido Finance announced that it has successfully exceeded one million validators on the Ethereum network, a noteworthy accomplishment. This announcement was made on April 29. Liquid staking protocols like Lido have a crucial role in simplifying staking for individual users who lack 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. This impressive statistic indicates that over 27% of the total Ethereum supply is staked on the network. Furthermore, major exchanges such as Coinbase also support Lido, contributing to its success with a 13.6% share.
Liquid staking protocols are experiencing rapid growth due to the liquidity advantages they offer users. Lido users stake their ETH with the protocol and receive staked ETH (stETH) in return. This staked ETH can also be used in other DeFi protocols. However, in traditional staking, tokens are locked and cannot be used until they are unstaked.
The DeFi ecosystem continues to expand, driven by influential players like liquid staking protocols. Lido holds a significant share of the total DeFi Total Value Locked (TVL). 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. Prominent crypto founders have expressed worries about the increasing dominance of protocols like Lido. Ethereum co-founder Vitalik Buterin has previously highlighted the potential risks of centralization associated with Lido and the dangers of a single stake token gaining control over the network.
It is crucial for protocols like Lido to address these concerns and take appropriate measures. Nonetheless, establishing a diversified and resilient structure is also 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 associated risks of cryptocurrencies and should conduct their own research.