Lido Finance, the largest decentralized finance (DeFi) protocol on the Ethereum network, has achieved a major milestone by surpassing one million validators. This accomplishment solidifies Lido’s position as a leading liquid staking protocol, making staking more accessible and accelerating the process.
The news of Lido Finance surpassing one million validators was announced on April 29. Liquid staking protocols like Lido are crucial for individual users who lack the substantial capital required to run their own validator nodes on Ethereum. These protocols simplify the staking process, allowing users to stake their ETH and receive staked ETH (stETH) in return. This staked ETH can also be used in other DeFi protocols. In contrast, traditional staking methods lock the tokens, rendering them unusable while staked.
Dune data reveals that Lido Finance currently represents 28.5% of the total ETH staked, an impressive figure that signifies over 27% of the total Ethereum supply being staked on the network. Major exchanges like Coinbase also support Lido, contributing a 13.6% share.
The growth of the DeFi ecosystem is fueled by key players like liquid staking protocols. Lido Finance holds a significant share in the total value locked (TVL) in DeFi. According to DeFiLlama, liquid staking protocols have surpassed a total TVL of $47.7 billion, with Lido leading at $29.9 billion.
However, the rapid growth of protocols like Lido has raised concerns among crypto founders. Ethereum co-founder Vitalik Buterin has expressed worries about the potential centralization risks posed by Lido and the possibility of a single stake token gaining control over the network.
It is crucial for protocols like Lido to address these concerns and implement appropriate measures. While the growth of the DeFi ecosystem is important, it is equally important to establish a diversified and resilient structure for its healthy development.
Disclaimer: This article is not intended as investment advice. Investors should be aware of the high volatility and risk associated with cryptocurrencies and conduct their own research.
