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While liquid restaking provides more utility for staked tokens, it also comes with its own risks, like the depegging and price volatility for derivative tokens.
Ethereum liquid restaking protocols saw their total value locked (TVL) increase by almost 6,000% in 2024, as the demand for staked asset utility increased this year.
On Jan. 1, decentralized finance (DeFi) data aggregator DefiLlama showed that Ethereum’s liquid restaking TVL used to be around $284 million. After almost a year, the amount surged almost sixty times, reaching $17.26 billion on Dec. 15.
Liquid restaking total value locked in Ethereum. Source: DefiLlama
A recent ruling from a California court has implications for decentralized autonomous organizations (DAOs), especially those involved in Ethereum (ETH) liquid staking. A California court ruled today that Lido DAO, which manages the Lido liquid staking protocol, is classified as a general partnership under California law, meaning its members could be held legally liable for […]
The post California Court Rules That Ethereum Liquid Staking Solution Lido To Be Treated As Legal Entity appeared first on The Daily Hodl.
Some top LSTs have previously seen price deviations of up to 77% from Ether’s price due to mass sell-offs paired with liquidations on leveraged lending protocols.
The $45 billion liquid staking sector is raising concerns among investors over the long-term price stability of cryptocurrencies tied to these protocols.
Liquid staking creates more capital efficiency for investors by offering an equivalent of the initial staked token that can be deployed in other decentralized finance (DeFi) applications.
However, liquid staking tokens (LSTs) could temporarily lose their price peg to Ether (ETH), according to Carlos Mercado, a data scientist at Flipside Crypto research firm.
Institutional interest is increasing thanks to the capital efficiency introduced by restaking and liquid staking.
Ethereum validators recorded significant growth during the past year, highlighting the continued institutional adoption of cryptocurrencies.
The number of Ethereum validators increased by more than 30% during the past year, exceeding one million for the first time in June 2024, up from 824,300 in September 2023, according to a research report from Flipside Crypto shared with Cointelegraph.
The rise in validators is attributed to growing institutional interest, spurred by developments in the restaking and liquid staking sectors, said Carlos Mercado, a data scientist at Flipside Crypto.