Liquid Staking: Assessing the Lay of the Land

  • Lido Finance led by market capitalization, active addresses and development activities.
  • Ankr, SSV and Frax Share have also made their brands known.

If there is one segment of the crypto industry that has emerged as a promising trend, it is the liquid staking sector. By definition, liquid staking allows users to share the rewards of staking across a protocol without committing to infrastructure maintenance.

How many are 1,10,100 LDO is worth today?

Although the activity has been popular for some time, the rise in interest in the bear market has been somewhat disconcerting.

At the same time, it is perhaps not entirely surprising that investors have decided to go this route given the weakness in token prices and the market in general.

The Lido leads, others follow

Undoubtedly, a project that has repeatedly proven relevant in the liquid staking business is Financing of the Lido [LDO]. Although other projects have explored this innovative space, facilitating activity has put the Lido in the spotlight.

And with Ethereum [ETH] the completion of the Shapella upgrade, it appears to have become hard to ignore the Lido protocol. To begin with, no project in the sector has a market capitalization close to that of the Lido.

At press time, Lido’s market capitalization was $1.72 billion. Second on the list is rocket pool [RPL] whose market cap is $587.86 million.

Market cap of Lido Finance and market cap of Rocket Pool

Source: Santiment

An overview of the metric related to these projects showed that those connected to Ethereum are leading the pack. However, Ankr, which operates on the BNB channel, has moved closer to the others.

Benqui, the algorithmic protocol of the liquidity market on avalanche [AVAX] also fell into the top 10.

Inevitably, Lido has had the highest number of daily active addresses over the past 30 days.

Active addresses indicate the number of unique users participating in the asset transfer daily. But this was not a notable observation in the sector.

Surprise additions to the herd

Frax Share closely follows Lido. Launched in 2020, Frax Share is an open-source fractional algorithmic stablecoin system. Additionally, the function of the protocol is to provide scalable and decentralized money in place of fixed assets such as Bitcoin [BTC].

At the time of writing, Frax’s 30 Days active addresses were 3,969 – less than 2,000 addresses to reach the Lido’s 5,668. Hence, it implies that Frax was another liquid staking project that caught the interest of market participants.

Active addresses of Frax Share and active addresses of Lido Finance

Source: Santiment

Again, Lido led the development activity. The development activity considers public GitHub repositories linked to a project. At press time, Lido’s development activity was 10.98. This suggests that the dedication to upgrading and polishing the Lido network was pervasive.

Like Lido, another project – SSV.Network also had an impressive performance with this metric. As a decentralized staking infrastructure, SSV enables distributed operation of Ethereum validators.

Thus, the impressive state of its development activity means that validator keys are consistently distributed among nodes. For this reason, active failovers between nodes and validators are rare.

Development activity of Lido Finance and development activity of the SSV network

Source: Santiment

Not an exciting time for prices

Interestingly, the growth of the BNB channel has been reflected in the volume of Ankr. Despite a drop of 54.71% in the last 24 hours, the Ankr volume was still higher than other liquid staking projects except Lido Finance.

Realistic or not, here Market cap of ANKR in terms of RPL

This value means that the project could boast an impressive transfer of assets from exchanges to other sources, including distributed ledgers.

ANKR Volume and Price

Source: Santiment

Regarding their token prices, CoinMarketCap showed that LDO has lost its bullish momentum. At press time, the value of the token has declined by 5.95% over the past 90 days.

Other liquid staking tokens including RPL, ANKR, and FXS all fell 36.60%, 19.15%, and 24.31% over the same period.

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