Ethereum

Evan

April

<ul> 
 <li><em>TVL has grown by 3.5x since the beginning of 2023</em></li> 
 <li><em>Increasing market share fueled security concerns for Ethereum</em></li> 
</ul> 
<p><a href="https://ambcrypto.com/?s=lido" target="_blank" rel="noopener" data-wpel-link="internal">Lido Finance [LDO]</a>, the largest liquid staking protocol, recorded another fruitful month in November, confirming its place as one of 2023’s biggest success stories.</p> 
<h3 id="sharp-surge-in-staked-eth">Sharp surge in staked ETH</h3> 
<p>The total value locked (TVL) on the DeFi project went past $20 billion for the first time since April 2022, according to a November monthly <a href="https://blog.lido.fi/lido-monthly-report-november-2023/" target="_blank" rel="noopener nofollow external noreferrer" data-wpel-link="external">report</a> published by Lido. This marked a 18.61% hike since October.</p> 
<p>AMBCrypto validated the statistics with DeFiLlama, which also revealed a 3.5x hike in TVL since the beginning of 2023. To put this in context, Lido’s TVL as of press time was more than the combined TVL of the second and third-ranked protocols on the list.</p> 
<div id="attachment_358410" style="width: 100%" class="wp-caption aligncenter">
 <a href="https://statics.ambcrypto.com/wp-content/uploads/2023/12/Lido-new.jpg" data-wpel-link="internal"><img aria-describedby="caption-attachment-358410" decoding="async" class="wp-image-358410 size-full" src="https://statics.ambcrypto.com/wp-content/uploads/2023/12/Lido-new.jpg" alt="" width="700" height="333" srcset="https://statics.ambcrypto.com/wp-content/uploads/2023/12/Lido-new.jpg 700w, https://statics.ambcrypto.com/wp-content/uploads/2023/12/Lido-new-300x143.jpg 300w" sizes="(max-width: 700px) 100vw, 700px"></a>
 <p id="caption-attachment-358410" class="wp-caption-text">Source: DeFiLlama</p>
</div> 
<p>The deposits were significantly boosted after the launch of its version 2, which enabled users to withdraw their <a href="https://ambcrypto.com/search/steth" target="_blank" rel="noopener" data-wpel-link="internal">Staked ETH [stETH]</a>&nbsp;to&nbsp;<a href="https://ambcrypto.com/search/eth" target="_blank" rel="noopener" data-wpel-link="internal">Ethereum [ETH]</a>. With greater confidence in the staking process, users rushed to stake their ETH in pursuit of yields.</p> 
<p>As per the report, staked ETH rose to 9.27 million, representing a marked increase of 5.17%. Moreover, ETH saw double-digit gains in its price in November, which further helped in boosting the USD value of the deposited funds.</p> 
<p>Similarly, the number of unique ETH stakers exceeded the 200,000-mark, a hike of 2.96% from the previous month.</p> 
<h3 id="not-everything-was-worth-celebrating">Not everything was worth celebrating</h3> 
<p>Clearly, Lido is the undisputed leader in liquid staking. Using DeFiLlama statistics, AMBCrypto uncovered an astounding 77.27% market share held by the staking powerhouse.</p> 
<div id="attachment_358431" style="width: 100%" class="wp-caption aligncenter">
 <a href="https://statics.ambcrypto.com/wp-content/uploads/2023/12/Lido-share.jpg" data-wpel-link="internal"><img aria-describedby="caption-attachment-358431" decoding="async" class="wp-image-358431 size-full" src="https://statics.ambcrypto.com/wp-content/uploads/2023/12/Lido-share.jpg" alt="" width="536" height="348" srcset="https://statics.ambcrypto.com/wp-content/uploads/2023/12/Lido-share.jpg 536w, https://statics.ambcrypto.com/wp-content/uploads/2023/12/Lido-share-300x195.jpg 300w" sizes="(max-width: 536px) 100vw, 536px"></a>
 <p id="caption-attachment-358431" class="wp-caption-text">Source: DeFiLlama</p>
</div> 
<p>This aspect, however, has prompted concerns about centralization and the protocol posing a security risk to Ethereum. Without mincing words, Ethereum developer Evan van ness <a href="https://x.com/evan_van_ness/status/1697627874449109135?s=20" target="_blank" rel="noopener nofollow external noreferrer" data-wpel-link="external">called</a> Lido as the “biggest attack on Ethereum’s decentralization” in an X post some months ago.</p> 
<p>Evan mentioned the 33% market share limit in the post, which if exceeded, may theoretically allow the protocol to manipulate the network.</p>  
<p style="text-align: center;">Realistic or not, here’s&nbsp;<a href="https://ambcrypto.com/calculator/marketcap" target="_blank" rel="noopener" data-wpel-link="internal">LDO’s market cap in BTC’s terms</a></p>  
<p style="text-align: left;">At the time of writing, the governance token of the protocol LDO was exchanging hands at $2.30, as per <a href="https://coinmarketcap.com/currencies/lido-dao/" target="_blank" rel="noopener nofollow external noreferrer" data-wpel-link="external">CoinMarketCap</a>. Unlike the appreciation seen on the liquid staking front, the token has remained tepid of late, recording paltry gains of just 1.6%.</p>

Lido may be ending 2023 on a high, but there is a caveat

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