Lido Finance, in which Turks also invest, surpassed MakerDAO, the largest DeFi protocol on the market, with $5.9 billion locked in its staking platform. This move of Lido was also reflected in the altcoin price.
Altcoin price rises 24% as Lido Finance breaks big record
Lido DAO’s governance token, LDO, has increased by almost 24% since the start of January 2023. The altcoin, which was at its peak, rose 34% in two unfinished days entering the new year.
Like all such abnormal movements in the crypto market, there is a reason for the results shown in the price chart when it comes to LDO. This time, the catalyst was that Lido DAO outstripped MakerDAO, which launched DAI, one of the largest stablecoins on the market in terms of total locked value (TVL).
MakerDAO previously held the top spot with a TVL of $5.93 billion. Lido Finance, which increased its liquid staking services across various networks to $5.98 billion, pushed it to second place. At the same time, the fully diluted market cap of the Lido DAO token is $1.17 billion. That’s less than five times the total value locked in the platform.
The emergence of Lido Finance as number one by TVL is a definite success for Lido, the decentralized autonomous organization that manages the protocol. As a result, the management token, LDO, is in demand for those who want more power in the process. Capitalization and the huge gap in TVL, as well as the opportunity to gain a share of power in the ‘biggest now’ DeFi project put LDO above all others in 2023.
Leading altcoin Ethereum Merge drives demand for staking solutions
The increase in Lido’s TVL is linked to the massive increase in demand for Ethereum staking solutions. According to a recent Nansen report, Ethereum Merge has resulted in high demand for such solutions. Lido Finance took this opportunity to solidify its position in the industry. Also, it has now emerged as the best DeFi protocol.
According to the Nansen report, Lido currently has the highest amount of staked ETH at around 31%. This is a significant dominance compared to the market share of major crypto exchanges, including Coinbase and Kraken, which have 15% and 8.5% respectively. According to the official website of the protocol, Lido Finance currently has $5.8 billion staked Ether. On the other hand, there is approximately $43.9 million staked in Polygon and $23.2 million staked in Solana. Also, there is $11 million staked in Polkadot and $2.2 million staked ETH in Kusama.
DeFi TVL records big crash
As you follow on Kriptokoin.com, the DeFi market witnessed a huge drop in TVL last year. Thus, it lost more than 70% of its value. It also fell from $167 billion recorded in January 2022 to $38.6 billion at the time of this writing.
The increasing rate of hacking and cybercriminals in the DeFi space also contributed to the overall decline in the industry. According to reports, DeFi protocols suffered the most loss in 2022. The biggest exploit was the Ronin Network hack, in which the attackers stole over $620 million in digital assets. DeFi yields remain under pressure overall. Meanwhile, the market is currently experiencing the fiercest bear market in crypto. In this environment, DeFi has shown remarkable resilience.