Aakash Gupta · 6 min read · Growth
Protocol Insights #2
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Protocol Insights #2 surveys popular liquid staking protocols and recent ETH staking activity, highlighting depeg incidents for stETH, rETH, and SETH2, and a shift from decentralized to centralized staking actors. It also analyzes market shares, inflows, governance risks, and the economics of leading players like Lido, including treasury concentration and funding activity.
Key Takeaways
- Depeg events across stETH, rETH, and SETH2 exposed liquidity and pricing risks in liquid staking derivatives.
- A notable shift toward centralized staking pools (e.g., Coinbase, Kraken, OKEx) is evident, with centralized actors dominating the staked ETH in the latest period.
- Lido remains the largest staked-ETH provider, but its market share has stalled and inflows have cooled since mid-2022.
- Concentration risk exists in Lido’s treasury, which is heavily weighted in LDO, prompting governance proposals to diversify.
- Economics and funding around liquid staking are shaping profitability and strategy, with significant treasury considerations and notable fundraising activity.
Excerpt
In this weeks coverage we look at popular liquid staking protocols and the recent activity around $ETC. ETH 2.0 Liquid Staking - Overview The overall staked supply of Ethereum stands at 11% or 13,142,680 $ETH tokens as of August 2022. The percentage of staked $ETH has grown significantly (47%) YTD as the merge narrative becomes clearer Source: Ethsta.com Liquid staking however has not been without its problems, tokens such as $stETH (Lido), $rETH (Rocketpool), $SETH2 (stakewise) recently faced depeg events to $ETH. Mainly as Celsius was forced to liquidate its $stETH position in the $stETH-$ETH Crv pool, which did not…