Ethereum staking is on the rise this week, as token prices surge double-digits. Liquid staking is a process which allows users to deposit Ethereum (ETH) into a protocol and have those assets deposited to the Ethereum mainnet as a derivative or staked token. This is beneficial as it doesn’t require a minimum stake of 32 ETH, like depositing directly does. The process has been popular since Ethereum began its transition to a proof-of-stake consensus algorithm in 2020, and this has culminated in the successful Shapella upgrade last month. This enabled users to withdraw their staked Ethereum from the mainnet.

Since the upgrade, the staking contract has seen 19.3 million ETH staked, almost reaching pre-upgrade levels. This has benefitted decentralized Liquidity-Providing Derivatives (LSD) platforms who have a dominant 36% market share compared to other staking options. These platforms are gradually building a market stronghold in this sector, while Coinbase’s staked ETH derivative (cbETH) has seen a drop, shrinking from 16.4% to 14.5%.

The top benefit of LSD platforms like Lido Finance (LDO) and Rocket Pool (RPL) have been their reliable performance, with their tokens surging 22.9% and 12.8% respectively. Lido’s staked version of ETH (stETH) implies a 9.87% increase and Stakewise (SWISE) and Frax Finance (FXS) scores of 38.73% and 3.71% respectively in the last 30 days. Tokens for other staking projects like Frax Finance, StakeWise, and ANKR, also surge with around 3-6% over the last 24 hours.

It seems Ethereum’s proof-of-stake consensus algorithm has been a success and these initially-unexpected benefits have started to pay off. Ethereum stakers can now enjoy liquid staking, keeping their investments liquid and maximizing returns as previous early-adopters once had to wait for their investments to reach the minimum threshold.



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