TokenInsight: TVL of LSDFi Increased by Over 700% in Q2, Still Has Potential to Grow

TokenInsight's latest report, Crypto Market Insights 2023Q2, shows that after Ethereum's Shapella upgrade in April, the $ETH staking amount had a rapid growth, which drove the LSD market to expand. LSDFi related protocols recorded a huge TVL boost, and there is still room for growth.

Although there were concerns that the Shapella upgrade would bring selling pressure to $ETH, it turned out that the upgrade accelerated the growth of $ETH staking amount. As of the end of June, the total $ETH staking reached 23.54M, a 48.4% increase compared to the beginning of the year. In Q2, the $ETH staking rate rose from 14.95% to 19.57%.

Because of regulation pressure, CEX's share of $ETH staking declined from 30.2% at the beginning of the year to 19.6%, while the LSD market was getting bigger. The LSD market landscape remained unchanged, with Lido maintaining a dominant position as the largest liquidity staking service provider. In Q2, Lido's staked $ETH increased by 32.6%, reaching around 7.5M. Despite smaller shares, Frax and Rocket Pool's staked $ETH significantly rose in Q2, increasing by 90.4% and 69.7% respectively.

Correspondingly, more DeFi protocols integrated LSD, leading to the emergence of LSDFi. In Q2, LSDFi's TVL increased by approximately 738%. Lybra Finance, a stablecoin issuance platform, is currently the largest LSDFi protocol. By the end of June, it had a market cap of $14.8M and a TVL of $187M.

However, the LSDFi market is still in an early stage, without a significant competitive landscape. As of the end of June, $ETH staking amounted to around $44.5B, while LSDFi's TVL was only $570.5M, indicating significant growth potential. TokenInsight predicts that LSDFi will be a hot trend in Q3.

To learn more about the crypto market in Q2, please read: Crypto Market Insights 2023Q2

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