The ETH betting market is cooling in 2024: since August, the ETH confirmation queue has averaged less than one day and rarely exceeds four days per year. Compounding this whole situation is the declining reward for ETH betting. Currently, ETH bets are less lucrative than other major Tier 1 protocols such as Cosmos, Polkadot, Celestia and Solana, with rewards ranging from 7% to 21%.
However, #ethereum betting yields remain the de facto benchmark in decentralized finance, playing a role similar to the U. S. federal funds rate in traditional finance.
While the influx of bets has begun to taper off, the supply growth of the largest participants in the ethereum betting market has stalled. The #ETH stub fund, stETH, offered by Lido has remained relatively constant this year, averaging 9.6 million ETH. This reflects slowing growth in the total amount of ETH placed on Beacon Chain contracts, which increased by about 5.7 million ETH this year after nearly doubling last year.
Lido's stETH, which accounts for about 28% of the total secured ETH market, grew by a modest 5% over the past year, well below the 90% growth rate in 2023. stETH is still widely used as a collateralized #DeFi , and Lido is the largest DeFi by total value of collateral (TVL). protocol.
Other competition between protocols is intensifying with the emergence of new players with higher yields, such as Spark and Morpho, and alternatives to re-stacking protocols such as EtherFi. The share of (w)stETH hosted on Aave, the largest lending and borrowing protocol, in the total stETH supply on Ethereum has declined from 20% to around 13% in 2023 and remains relatively unchanged this year.
In addition to external competition at the protocol level, stETH also faces competition as collateral for the DeFi protocol: stETH's share of (w)stETH deposits on Aave has fallen from 46% at the start of the year to 27% as of last week.
As competition in ETH betting intensifies with the emergence of other tier 1 betting platforms based on proof of stake, offering higher returns and diversifying protocols, the betting ecosystem as a whole could conceivably benefit from a reduction in the number of players.
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