According to defillama.com there is $214 billion in total decentralized finance value at the time this article was written. The largest defi protocol by TVL is Curve Financing, the decentralized exchanging (dex) platform. According to statistics from defillama.com, Curve is the leader of the pack today with $20.71 trillion and a dominance rate of 9.67% as of April 20, 2022.
Curve leads the pack in TVL for defi protocols, but liquid staking solution Ludo could soon take over. According to defillama.com metrics today, Lido’s TVL is $18.97 Billion, an increase of 16.02% in the last 30 days. Lido is seeing significant usage due to the defi protocol which allows Ethereum, Terra, Polygon and Kusama users use their staked assets for yield.
If a user decides to bond Terra’s LUNA to the token called BLUNA they will exchange LUNA for BLUNA and start receiving staking rewards. To earn more rewards, BLUNA tokens may also be used to join pools. Similar results can be made for other networks such as Ethereum. Lido’s staked Ethereum (STETH), has the 18th largest market cap out of 13,671 cryptocurrency. Lido staked Solana (STSOL ) has the 193rd highest market cap and BLUNA the 22nd.
Although defillama.com states that Lido has a TVL of $18.97 trillion, this only represents four blockchains that Lido uses to stake. Polygon is not included in defillama.com’s metrics. According to Lido’s stats, April 20, 2022 there were $19,220.700,179 staked between 99,606 stakers. According to Lido stats, $10.6 billion comes from Ethereum, $8.21 trillion from Terra, $363 Million from Solana and $3.3 Million from Kusama. The Polygon network is worth $13.8 million.
3.9% to 23.9% APY depending on Chain Rewards and Skipping Validator lock-ups
Current staking estimates show that Lido’s Ethereum Staking Solution has a 3.9% annual percentage return (APY), and Kusama has a 23.9% APY. Lido’s ability to double stake assets is a highlight, but there are defi liquidity pool providers who will take the reward from Lido, Lido warns.
Lido has one advantage: people don’t have to use a validator lock up period. However, they can still sell their bonded tokens in the open market. This route is not recommended as the user may lose the dex swap fee and approximately 1-2% depending on the value of the bonded token.
Lido Finance can be considered a “staking company” and there are many in the industry. There are many staking companies today, including Kyber Network and Celer Network. However, Lido has a tremendous amount of value today, across five different blockchains, and the recent increase in staked assets has been exponential.