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Crypto's latest story is liquid staking, as platforms and chips have recently taken flight.
Ethereum will go through the Shanghai upgrade in March, which releases ETH staked on the Beacon Chain. Industry analysts think this will be good news for cash staking protocols as they provide better incentives and returns. As opposed to direct staking, they offer a more flexible way of staking and winning without locking the warranty.
On January 10, "Viktor Challenge" said to its 13,000 subscribers:
"Liquid Staking Derivatives (LSD) will explode with the next Shanghai Ethereum update."
Alphabetical series of crypto narratives? 01
Liquid Staking Derivatives (LSD) is blowing up with the upcoming Ethereum’s Shanghai Upgrade.
I spent 1,439 minutes exploring the LSD narrative, so you don’t have to.
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— Viktor DeFi ?????? (@ViktorDefi) January 9, 2023
Liquid Staking Surging
“Accessibility, immovability, and illiquidity are the top drawbacks of crypto staking,” the analyst added. Liquid staking platforms provide a staking token which can also be used in other challenge protocols for additional returns.
Lido is the industry's first benchmarking platform, with EPF 4.8 million invested, accounting for 30% of the total amount.
Its governance token, LDO, has been on fire in recent weeks, gaining a whopping 57% over the past seven days. Other milestone platform tokens, like stakewise (swise), also worked well.
The amount put on platforms such as the lido, the rocket pool, the stake and the frax also increased regularly as this new story gains momentum.
Unlike Lido, Rocket Pool is without authorization and a very decentralized state-of-the-art analysis to predict that it might become a market leader.
It's the other side of the coin, there are two or three hazards for liquid staking deposits, like smart deal risk, de-peg risk (what happened to Lido stETH in the past year), and reduce the chances.
However, with eth staked on the verge of being slowly liberated, much of it can be moved to more lucrative liquid staking platforms this year. Not all of the staked ETH will be available at once, as current specifications allow a maximum of 57,600 partial withdrawals per day, according to CoinMetrics.
Ethereum Price Outlook
Ethereum has not performed as well as liquid staking tokens with a gain of just 10% since the beginning of the year.
ETH prices are currently up 1% on the day at $1,323 at the time of writing, according to CoinGecko. Assets lagged behind their older brother and remain down 73% from their highest level in November 2021.
