Author: Nancy, PANews
As PoS becomes the mainstream consensus mechanism of the public chain, liquidity pledge has become an important topic in the crypto market. At a time when the first-mover advantage and head effect are particularly prominent, a group of new players are entering the liquidity pledge track with funds.
Ethereum and Solana become the first choice for staking, or face the dilemma of centralization
Liquidity is an inexhaustible source of growth and innovation in the crypto market. The emergence of innovative liquidity staking has undoubtedly released the liquidity of re-pledged assets. It is gaining more and more attention and recognition, and its market penetration rate continues to grow.
For PoS chains, the more users participate in staking, the higher the staking rate, and the more secure the network. At present, the staking scale of major mainstream PoS chains is becoming increasingly large under the stimulation of economic incentives. According to StakingRewards data, as of August 13, the total locked-in amount of staking projects has exceeded US$496.84 billion, among which the staking rates of the top ten mainstream projects range from 25% to 80%. For example, the total staking value of Ethereum is about US$91.59 billion, and the staking rate is 28.06%; Solana's staking market value is US$55.58 billion, and the staking rate is about 65.32%; Sui's staking market value is US$8.13 billion, and the staking rate is 80.45%. This also means that with the rapid growth of market interest and adoption of staking, the growth space of the liquidity staking track will be further opened up.
According to DeFiLlama data, as of August 13, the liquidity staking track has 172 protocols, and the total locked volume has accumulated to more than US$43.04 billion, an increase of 120.7% from a year ago.
These TVLs mainly come from Ethereum, Solana, BSC, TON and Sui, among which Ethereum and Solana are the absolute main force of market growth. Ethereum, which ranks first, has a market share of 84.5% with US$36.4 billion locked in, Solana accounts for 8.1%, and the total share of other blockchains is less than 1%.
Behind the rapid growth of liquidity pledge funds, the industry's head effect is becoming more and more apparent. DeFiLlama data shows that as of August 9, the Top 10 accounted for nearly 82.5% of the overall market with a TVL of US$35.64 billion, mainly distributed on Ethereum (70%) and Solana (30%), which also means that the remaining 169 protocols only contributed US$7.57 billion, and their average TVL was only US$45 million. Not only that, the TVL growth of the liquidity pledge track mainly depends on leading projects. Lido, which ranks first, has an overwhelming advantage, and alone has taken away more than 60% of the market share with a TVL of more than US$26.31 billion.
Judging from the above data, although the opening of revenue channels and the unlocking of asset liquidity have brought scale effects to the liquidity staking track, the excessive concentration of market share may also bring centralization challenges. For example, Ethereum founder Vitalik Buterin emphasized the centralization risks of Ethereum staking a few months ago and proposed the new concept of "rainbow staking". In subsequent articles, he further announced the short-term and medium-term plans to improve Ethereum's permissionlessness and decentralization.
Liquidity pledge reappears in financing boom
In order to reduce the risk of centralization, the liquidity pledge track will not be dominated by one company for a long time, and the market needs more diverse participants. In the past two months, the liquidity pledge track has also been injected with "fresh blood", and many projects have received millions of dollars in financing, mainly from Ethereum, Monad, Solana and BSC.
Lido Institutional
In early August this year, Lido announced the launch of "Lido Institutional", a liquidity pledge solution for institutions. The Lido Institutional middleware solution combines the reliability and security required for enterprise-level pledges with the liquidity and practicality required for diversified institutional strategies.
aPriori
aPriori is a MEV-driven liquidity staking solution on the Monad network. Its innovative probabilistic verification design greatly reduces latency and maximizes the high performance of Monad to enhance user experience.
At the end of July, Binance Labs announced that it would invest in aPriori through an incubation program to promote MEV-driven liquidity staking. Prior to this, aPriori had accumulated $10 million in financing from Pantera Capital, Consensys, OKX Ventures, CMS Holdings and others.
Kintsu
Kintsu is a liquidity staking protocol also based on the Monad blockchain, founded last year by Stephen Novenstern, who previously served as head of strategy at Pangolin, a decentralized exchange on the Avalanche blockchain.
In July, Kintsu announced the completion of a $4 million seed round of financing led by Castle Island Ventures, with participation from institutions such as Brevan Howard Digital, CMT Digital, Spartan Group, Breed VC, CMS Holdings, Animoca Ventures, and angel investors such as Alex Matthews and Ross Trachtman of Brevan Howard Digital and Marin Tvrdic of Lido.
Ion Protocol
Ion Protocol, a liquidity release protocol for stakers, supports loans for staked and re-pledged assets, enabling users to deposit any validator-backed asset (including LST, re-pledged positions, etc.) into the collateral vault and mint allETH from their deposits.
Recently, Ion Protocol announced that it has completed a financing of US$4.8 million, with participation from Gumi Capital Cryptos, Robot Ventures, BanklessVC, NGC Ventures, Finality Capital and SevenX Ventures, bringing its total financing amount to approximately US$7 million.
Save
After Solana lending protocol Solend announced its name change to Save last month, it also announced three products including the SOL liquid staking token saveSOL.
Bima Labs
Bima Labs has developed a Bitcoin-backed stablecoin, USBD, which can be minted by providing Bitcoin liquidity pledge and re-pledge tokens as collateral. It will accept collateral from multiple blockchains, including Bitcoin, Bitcoin Scaling Network, Ethereum Virtual Machine (EVM) compatible networks, and Solana.
Bima Labs announced in July that it had raised $2.25 million in a seed round led by Portal Ventures, with participation from Draper Goren Blockchain, Sats Ventures, Luxor Technology, CoreDAO and Halo Capital, as well as angel investors including Ankr’s Ryan Fang, Chorus One’s Brian Crain, Sei Labs’ Jeffrey Feng and Berachain’s Smokey.
Infrared Finance
Infrared Finance is a liquidity staking protocol on Berachain that aims to maximize value capture by providing liquidity staking solutions for Berachain governance tokens BGT and Berachain Gas tokens BERA, as well as the necessary node infrastructure and PoL vaults.
In July, Infrared announced that it had raised an undisclosed strategic investment from Binance Labs. Previously, Infrared Finance also received a $2.5 million seed round led by Synergis, with other investors including NGC Ventures, Tribe Capital, CitizenX, Shima Capital, Dao5, Signum Capital, Ouroboros Capital, Decima, Oak Grove Ventures, etc.
Astherus
Astherus, a staking asset liquidity protocol, is a Binance Labs Season 7 incubation project that supports Liquidity Staking Tokens (LST) and Liquidity Re-staking Tokens (LRT). Its uniqueness lies in its multi-asset staking system, LST foundation, and LST-driven DApp ecosystem, including DEX AstherEX that supports heavy-staking asset trading, AstherEarn that aggregates profit strategies from multiple blockchains, and AstherLayer, a proof-of-stake Layer 1 blockchain that expands the utility of LST on other blockchains.
