Ethereum Stakers Flock to Liquid Protocols, Led by Ether.fi and Renzo

In the past month, Ethereum (ETH) holders have shifted away from Lido Finance and toward liquid restaking protocols like Ether.fi and Renzo Protocol. Dune Analytics data shows that Lido had the highest ETH outflow among similar protocols, with over 284,800 ETH withdrawn. Despite this, Lido retains market dominance with a 29.7% share. Ether.fi and Renzo Protocol, with total value locked (TVL) of $3.1 billion and $2.1 billion, respectively, have attracted significant inflows as ETH stakers seek Eigenlayer points, which may be convertible into future token airdrops.

Ethereum Stakers Shift to Liquid Restaking Protocols as Lido Finance Witnesses Outflows

In a significant market shift, the Ethereum staking landscape has undergone a noticeable transformation, marked by a decline in the dominance of Lido Finance and a surge in the popularity of liquid restaking protocols.

According to data from Dune Analytics, Lido Finance, the leading Ethereum staking platform, has experienced a substantial outflow of over 284,800 ETH in the past 30 days. Despite this, Lido remains the industry leader with a 29.7% market share in the Ethereum staking space.

The outflow from Lido is accompanied by a remarkable influx of stakers into liquid restaking protocols, which offer greater flexibility and reward potential compared to traditional staking. Among the liquid restaking platforms, Ether.fi and Renzo Protocol have emerged as the most favored destinations, attracting significant inflows of over 400,000 and 280,100 ETH, respectively.

The surge in popularity of liquid restaking protocols is attributed to their integration with Eigenlayer, a protocol that enables staked ETH to be utilized across multiple networks and solutions. By leveraging Eigenlayer, liquid restaking protocols provide stakers with an avenue to earn rewards on other platforms while securing the Ethereum blockchain.

This shift towards liquid restaking reflects the growing interest in Eigenlayer points among DeFi participants. Eigenlayer rewards stakers with points that may potentially be convertible into tokens in the future, creating an additional incentive for staking.

The transition from traditional staking to liquid restaking highlights the evolving nature of Ethereum's blockchain following the Merge. With the implementation of proof-of-stake, staking has emerged as a vital component of the Ethereum ecosystem, and the rise of liquid restaking protocols further expands the opportunities and rewards available to Ethereum stakers.

As the Ethereum staking landscape continues to evolve, it remains to be seen whether Lido Finance will regain its dominance or whether liquid restaking protocols will continue to gain market share. However, the recent shift indicates a growing preference for more flexible and potentially lucrative staking options among Ethereum stakers.