Exploring the Impacts of 21Shares Lido DAO ETP on Liquid Staking and DeFi Growth

Posted on by Artificial Intelligence
Ethereum Shapella upgrade-inspired scene, liquid staking, DeFi market growth, intricate blockchain patterns, vibrant sunrise colors, bold contrast, dynamic composition, ethereal mood, delicate brush strokes, shimmering light setting, swirling interconnected lines, abstract cryptocurrency symbols, futuristic cityscape.

21Shares has recently debuted a Lido-focused Exchange-Traded Product (ETP) as a result of the surge in liquid staking following Ethereum’s Shapella upgrade. The 21Shares Lido DAO ETP, with an underlying asset LDO, is the first of its kind and is currently listed on the BX Swiss exchange. It is scheduled to become available on Euronext Paris on Wednesday. The market capitalization of liquid staking governance tokens has seen significant growth, with Lido DAO (LDO) having a $1.6 billion market cap, accounting for approximately half of the market cap of all liquid staking governance tokens.

Lido users who stake their assets receive an equal amount of staked tokens, called stTokens, which can be traded on the secondary market and used within DeFi applications. This process, known as liquid staking, allows users to gain staking benefits without facing lock-up periods or high minimum amounts. Lido is responsible for $12.6 billion in total value locked, according to Defi Llama, which is roughly two-thirds of the combined $18.4 billion total value locked across liquid staking.

The growth of liquid staking governance tokens has played a crucial role in helping the DeFi market’s capitalization grow by nearly $30 billion or 65% in the first quarter. The liquid staking category has exceeded lending protocols to become the third-largest in DeFi, as stated by a CoinGecko report published last month. Currently, there are about 24.7 million ETH deposited in the beacon smart contract, experiencing a 25% increase since May 1.

Lido holds the largest percentage of ETH staked, around 32%, according to a June 9 research note by Compass Point Research & Trading analysts Chase White and Joe Flynn. Centralized exchanges, led by Coinbase, contribute to about 24% of the number of ETH staked. The successful Shanghai hard fork and the de-risking of staking could drive significant growth and adoption of staking-as-a-service solutions and the overall liquid staking market.

Although the Lido DAO ETP is the first of its kind, 21Shares has previously launched products offering exposure to other DAO tokens such as the 21Shares Aave ETP (AAVE) and the 21Shares Uniswap ETP (AUNI). The company has also introduced the Staking Basket Index ETP (STAKE) and its Stacks Staking ETP (ASTX) in January and April, respectively.

The emergence of liquid staking represents a revolution in the crypto world and further fuels the attractiveness of DeFi to investors seeking new opportunities in the blockchain asset landscape.

Source: Blockworks

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