The Rise of Liquid Staking: Maximizing Yield and Flexibility in DeFi

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The Rise of Liquid Staking: Maximizing Yield and Flexibility in DeFi

Since December 2020, Ethereum has been transitioning to a proof-of-stake model, allowing investors to stake their Ether on the network. However, the locked nature of staked Ether in traditional DeFi has led to the emergence of liquid staking protocols. These protocols enable depositors to stake their Ether while receiving liquid staking tokens in return, which can be used elsewhere in DeFi. Popular applications for these tokens include providing liquidity and collateral for DeFi loans. In exchange for their services, liquid staking protocols take a small portion of the staking rewards. The largest protocol in this space, Lido, has issued $14.5 billion worth of its native liquid staking token, making it a dominant player in DeFi. Tracking these protocols is crucial for understanding the Ether staking landscape and the overall DeFi market. A comprehensive dashboard provides charts and insights on TVL, inflows and outflows, as well as the market share of each liquid staking protocol. This market share can fluctuate based on fees and validator performance.