Why Are Liquid Staking Cryptocurrencies Seeing Double-Digit Gains?

Over the past week, liquid staking cryptocurrencies have been seeing a big upside. All of those tokens have successfully moved into the green territory, recording double-digit gains for his or her holders. Although these digital assets appear to be following the overall crypto market uptrend, there’s one other factor pushing up their prices.

Why Are Liquid Staking Crypto On The Rise?

Liquid staking cryptocurrencies have been receiving more attention ever for the reason that announcement that the Ethereum “Shanghai” upgrade is more likely to happen in March 2023. This upgrade is essential for the network because it should mean that staked ETH will finally be withdrawable.

Anticipation around this upgrade is already on the rise and liquid staking tokens are having fun with an excellent portion of this attention. Their popularity comes from the indisputable fact that they permit stakers to earn a yield on staked ETH despite the fact that they will’t withdraw their ETH. It also makes it possible for stakers to have tokens available which they will deploy on other protocols to further take part in the ecosystem.

Liquid staking protocols reward stakers with ETH-pegged tokens akin to stETH and ankrETH and make it possible for ETH users to stake without having to change into validators themselves. But as an alternative of getting to depend on centralized exchanges to do that, as was previously the case, these DeFi protocols are decentralized.

ETH price crosses $1,300 ahead of Shanghai upgrade | Source: ETHUSD on TradingView.com

The upper earning potential of staking with liquid staking protocols has led to more demand for them. With the Shanghai upgrade coming, it is predicted that more ETH shall be moved to those protocols, resulting in more demand for his or her native cryptocurrencies.

The Largest Liquid Staking Protocols

The biggest liquid staking protocol within the space now could be currently Lido Finance. It accounts for around 30% of the whole 15 million staked ETH, making it a vital contender within the space. Its native LDO token has a market cap of $1.6 billion and its price is up 57% within the last 7 days.

Liquid staking crypto

Lido is the most important liquid staking protocol | Source: CryptoSlate

Next in line is Frax Share whose price is up 21% within the last week. The digital asset’s market cap is nearly $403 million, rewarding users with frxETH for his or her staked ETH at an 8% APR. That is the very best APR of any liquid staking protocol. 

Rocket Pool takes third place with a market cap above $260 million and is up 18% within the 7-day period. But when it comes to ETH deposited, it’s considered one of the very best, accounting for around 6.5% of the whole market share.

Others include Ankr Protocol which is up 26% in 7 days, in addition to Stafi, pStake Finance, and StakeWise, all of that are up 32%, 20%, and 10%, respectively, in the identical time period. 

Follow Best Owie on Twitter for market insights, updates, and the occasional funny tweet… Featured image from Medium, chart from TradingView.com

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