ON–219: Liquid Staking Tokens 💧

Coverage on Stride, Eigenlayer, Jito, Benqi, Lido, Liquid Collective & Redacted.

Apr 2, 2024

ON–219: Liquid Staking Tokens 💧

Liquid Staking Tokens 💧

① Stride 🌊

📈 Stride commands 60%+ TIA LSD market, TVL +70% YTD

  • Stride is a liquid staking provider in the Cosmos ecosystem. Stride's total USD-denominated deposit value has increased 72% YTD. At 2023 year end, Stride supported 9 Cosmos chains but has since onboarded 3 more chains with Celestia now making up >34% of total USD TVL. Increased diversification of integrated chains allows Stride to capture a wider market and multiple revenue streams.
Source: Re7 Capital
  • As a generalist LSD provider, Stride has managed to dominate Celestia market vs. specialists such as Milkyway. Stride commands a 60% TIA LSD market share although this has kept flat since mid-February. Only 0.7% of the total TIA staked is staked via Stride showing the room for further growth in the TIA LSD market overall.
Source: Re7 Capital
  • Stride also integrated DYDX staking in January 2024 with 3M DYDX ($10M) now staked via Stride's LSD platform. Stride allows DYDX holders to auto-compound rewards in stDYDX (over 5.2M USDC staking rewards have been generated over the past 30 days) and use their yield-bearing token usable in DeFi. After 2 months, Stride market penetration is still low at ~2.5%.
Source: Re7 Capital
  • 💦🔬 Tx-Level Alpha: In May 2023, an ATOM whale deposited 117,000 ATOM to Stride in one single transaction before sending his stATOM to Osmosis to LP the stATOM/ATOM pool. While nearly a year old, the transaction perfectly showcases the utility of LSD providers within the Cosmos ecosystem - first with Cosmos Hub/ATOM here but the market started realising the utility could theoretically carry over to alternative Cosmos chains too.

② Eigenlayer 🔄

📈 EigenLayer exceeds 3.9M ETH in deposits ($13B), 115k addresses

  • EigenLayer total deposits have increased from ~410k ETH in December 2023 to over 3.9M ETH in April 2024 (~$13B). The largest chunk of this ETH is native restaked beacon-chain ETH (~59%). The next largest amounts are in stETH deposits (~23%), Swell ETH (~4%), Mantle (~4%), Stader (2.5%), Binance(2%), RocketPool (1.5%), and Coinbase (1%), etc. There was an uptick in TVL around Feb. 5, 2024 when 5 new types of staked ETH were added to the protocol. There have been ~115k unique depositor addresses.
Source: Dune Analytics - @yulia_is_here
  • Liquid restaking tokens also proliferated in the same time frame, with total LRT deposits >2.3M ETH. The largest is Etherfi's eETH at ~40%, followed by Renzo (28%), Puffer (16%), and Kelp (9%). Kelp and Puffer’s market share have been decreasing recently while Renzo has been increasing. Most is on ETH L1, with a minority on Arbitrum.
Source: Dune Analytics - @yulia_is_here
  • There are 231 operators currently participating in EigenDA on Holesky testnet, with 2,153 testnet stakers. Nethermind, Kiln, and 1to are the three largest operators adding up to 33% of the stake. NodeCattel, Galaxy, and 1to have the most # of testnet stakers (30%). Other AVSs on testnet include Lagrange, Omni, Ethos, Eoracle, AltLayer, and Aethos.
Source: holesky.eigenlayer.xyz

③ Jito 🥩

📈 Jito’s stake pool reached an all-time high of 9.3M SOL in TVL ($1.8B) and its stakers cumulatively received a record ~4,750 SOL in MEV rewards the month of March

  • JitoSOL is Solana’s first liquid staking token to include rewards from revenue associated with MEV extraction. The portion of MEV tips received by the stake pool’s validators and distributed back to stakers in the form of MEV rewards has experienced tremendous growth over the last 6 months, reaching an all-time high of 1,250 SOL the week ending Mar. 25 (~$235k at today’s rate). The weekly CAGR over that 6 month period is +26%.
Source: Dune Analytics - @ilemi
  • In the last 6 months, MEV tips to Jito-enabled validators totaled 340,472 SOL, with ~50% of that collected in the month of March alone. This recent exponential growth is due to the increased trading activity on Solana and consequent spike in MEV on the network, benefitting JitoSOL LST holders in the form of additional rewards.
Source: Dune Analytics - @ilemi
  • The number of unique MEV tippers also surged, with peak participation hitting 293,000 tippers the last week of March, up from just 68 over the same period 6 months prior. This trend demonstrates a significant increase in the adoption of Jito’s MEV infrastructure by Solana market participants.
Source: Dune Analytics - @ilemi
  • 💦🔬 Tx-Level Alpha: On Jan. 31 a trading bot managed to snipe the JUP token launch, sending a Jito-enabled validator and their stakers a $50,000 tip in the process. In block #245286930, roobot.sol 🤖 purchased 1.56M JUP for $625,000, at an average price of $0.42, shortly after $JUP went live on Meteora. Airdrops mean high volatility, high volatility means more MEV, and more MEV means more rewards for JitoSOL holders.

④ Benqi 🟥

📈 BENQI crosses 50,000 stakers as 1.65% of total AVAX in circulation is staked AVAX

  • Benqi is the leading liquid staking solution on Avalanche. Liquid staking increases capital efficiency throughout the Avalanche network by freeing up locked AVAX capital. Over 51k stakers are helping to secure Avalanche accounting for 1.65% of the total AVAX circulating supply.
Source: community.chaoslabs.xyz/benqi
  • Benqi’s sAVAX strategies and options have advanced substantially since launching in 2022 as automated market makers (AMMs), lending & borrowing protocols, yield aggregators and more, have integrated with the protocol. As these integrations grew, Benqi tapped into the matured liquidity produced by sAVAX liquid staking; this laid the foundation for protocol’s like Ignite.
Source: https://community.chaoslabs.xyz/benqi
  • BENQI is a suite of decentralized finance protocols consisting of BENQI Markets, BENQI Liquid Staking and Ignite. The combination of sAVAX, high lending/borrowing high yields, and the expansion of Avalanche subnets, has pushed Benqi’s TVL to $435M at the time of writing.
Source: DeFi Llama
  • 💦🔬 Tx-Level Alpha: Definitive, built on top of Benqi, offers a one-click non-custodial hyperstaking strategy that loops between Benqi and Aave. This saves users from having to manually leverage their funds in multiple places while earning at least 15% APY on AVAX. On entry, this strategy lends sAVAX at AaveV3 and borrows additional WAVAX against the collateral to restake at BENQI Staking for additional yield. On exit, the collateral is sold for the debt asset and the debt is repaid.

⑤ Lido 🏖️

📈 Lido accounts for over 61% of the LST market as Eigenlayer attracts 9.6% of the stETH supply

  • Lido’s flagship offering, the LST stETH, has a market capitalization of $31.5B. That figure also serves as Lido’s TVL, which is the largest in DeFi by nearly a factor of three. Lido also dominates the competitive liquid staking space — its $31.5B TVL accounts for over 61% of the total $51.4B LST market, according to DeFi Llama.
Source: Dune Analytics - @LidoAnalytical
  • Attracting nearly 1.3M tokens, worth $4.2B at the time of writing, Aave V3 is the top destination for users looking to collateralize their stETH. That accounts for 46% of the $9.1B collateralized stETH. Spark, a lending protocol built out of the MakerDAO ecosystem, has the second most collateralized stETH at 644k. Maker’s own collateralized debt protocol has the third most at 490k.
Source: Dune Analytics - @lido
  • Users have bridged roughly 150k stETH, worth $490.5M, to Ethereum L2s, according to a Dune Analytics query. Among those, Arbitrum leads with 95.5k stETH bridged. However, according to Etherscan, the new L2 Blast actually has had over $2B in stETH deposited. Users have also bridged stETH to other chains like Gnosis, which has attracted 33.6k stETH.
Source: Dune Analytics - @Lido
  • 💦🔬 Tx-Level Alpha: Eigenlayer, the liquid restaking protocol, is the second largest holder of stETH. The underscores the momentum of the liquid restaking space which has propelled Eigenlayer to attract nearly $3B of stETH, among other LSTs and native staked ETH.

⑥ Liquid Collective 🚰

📈 Liquid Collective’s 225% LsETH holder growth Q4-Q1

  • Liquid Collective is a distributed liquid staking protocol designed to meet the needs of enterprises, built and run by a broad and dispersed collective of leading web3 teams. The number of LsETH holders increased by over 228% in Q4 + Q1 in a strong six months of growth for the protocol’s LST. As a comparison, two other LSTs that promote meeting institutional market needs, cbETH and wBETH, saw roughly 20% and 215% growth in token holders, respectively.
Source: Dune Analytics - @web3content
  • EigenLayer opened LsETH restaking deposits Feb. 5 - Feb 9. 2024. A 14% dip in LsETH holders is seen during that window as participants moved their LsETH into EigenLayer’s deposit contract, with the growth in holders resuming after the window closed. This is matched by a spike in daily LsETH activity.
Source: Dune Analytics - @web3content
  • Liquid Collective’s total staked ETH underlying supply grew 180% Q4-Q1. Due to fluctuations in the price of ETH, the protocol’s TVL grew by 484.2% during that time, to over $242M at the time of writing. In total, users deposited 9,876.29 ETH worth of LsETH to EigenLayer during the open deposit window.
Source: Dune Analytics - @web3content
  • 💦🔬 Tx-Level Alpha: This is the largest LsETH deposit into Zircuit, likely part of the ZK rollup’s staking program to bootstrap liquidity. Representing a growing trend built on top LSTs’ ETH network rewards and EigenLayer’s points, Zircuit’s bootstrap program involves depositing ETH, LSTs, or LRTs to receive Zircuit points on top of native ARR. This points-based bootstrap method has taken off across the ecosystem over the last quarter, with ETH liquid restaking TVL over $8.5b at the time of writing per DefiLlama.

⑦ Redacted 🦋

📈 Pirex ETH Crosses 7,600 ETH Staked

  • In January, at the time of Redacted’s last "Our Network" feature, the project had just launched phase 1 of the Dinero protocol, Pirex ETH (pxETH), attracting 1,500 ETH in deposits. Since then, pxETH's TVL has soared to 7,600 ETH, marking a 406% increase in 3 months. With this growth, pxETH still remains the highest-yielding ETH liquid staking token. Redacted has also broadened pxETH's reach across various chains and L2s.
Source: dineroismoney.com/pxeth/metrics
  • As highlighted, apxETH (pxETH's staked form) consistently offers the highest ETH staking yield among Ethereum LSTs, at 8.38% APY currently. This high yield stems directly from Pirex ETH's two-token design, which amplifies the underlying staking yield.
Source: DeFi Llama
  • To increase pxETH utilization across DeFi, Redacted took pxETH multi-chain with LayerZero. pxETH now has integrations on Arbitrum, Optimism, Blast, Scroll, and BNB Chain. Currently, 15% (c. $2.7M) of pxETH supply has migrated from Ethereum mainnet to chase new yield opportunities.
Source: Dune Analytics - @funky
  • 💦🔬 Tx-Level Alpha: Recently, apxETH was added as collateral on Morpho. Through Contango—an app built on top of Morpho—a user looped 50 apxETH 6.19 times, accumulating ~308 apxETH. To do this, Contango initiated a flash loan of 262 ETH from Balancer, minted 258 apxETH, deposited 308 apxETH into Morpho, then borrowed 262 ETH to settle the Balancer loan. Because apxETH's staking yield is high relative to other LSTs, the user enjoys a ~47% APR, doubling the yield compared to using wstETH for the same transaction.

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