Opportunity
What is staking?
Staking is a core feature of Ethereum's Proof-of-Stake (PoS) system. In simpler terms, users contribute their Ethereum to the network's security and validation process. In return, they earn rewards. This creates a win-win situation: users get paid for contributing to the network, and Ethereum benefits from increased security and stability.
Ethereum: A Decentralized Powerhouse with Staking on the Rise
Ethereum is a massive decentralized blockchain, valued at around $500 billion. A significant portion of this value, $123 billion (or 26%), is currently locked up in a process called staking. This staking amount is steadily growing as users see it as a way to earn additional returns on their Ethereum holdings.
The Centralization Challenge: Lido's Dominance
However, there's a potential concern with Ethereum's staking system: centralization. Currently, 31% of all staked Ethereum is controlled by a single entity called Lido. This concentration of power goes against the core principle of decentralization, which is a key strength of blockchain technology.
The Rise of New Players: DeFcor and the Fight for Decentralization
To address this centralization issue, new staking protocols like DeFcor are emerging. These protocols aim to attract a larger share of staked Ethereum and promote native restaking, thereby promoting a more balanced and decentralized network. By having multiple staking providers, Ethereum's security and overall health become less reliant on any single entity.
Future Growth
Ethereum's transition to Proof-of-Stake (PoS) has been a success. Staked ETH has skyrocketed to 46% of all staked assets across blockchains and over 21% of the total ETH supply. This surge is even more impressive considering active supply metrics.
Institutional investors are taking notice, with the difference between ETH and BTC futures reflecting the staking yield. Staking on Eth has grown 100% since Jan 2023 with 32m Eth being staked currently
EigenLayer is driving innovation in Ethereum staking by enabling "restaking" - using staked ETH for additional security on other networks. This unlocks new yield opportunities for stakers. The rapid growth of EigenLayer's TVL and liquid restaking platforms like Ether.fi and Puffer highlights the potential for increased staking participation and boosted overall yields. While EigenLayer's own actively validated services haven't launched yet, future integration with these networks could offer even more attractive returns for stakers.
Although EigenLayer hasn't fully launched on the mainnet and its Actively Validated Services (AVSs) are yet to be deployed, our analyst team anticipates a significant surge in both Ethereum staking and native restaking on EigenLayer once AVSs become operational. This presents a valuable opportunity to capture market share and delve deeper into the technology's development.
LRT's
LRT's market is a new, fast-growing and less crowded market and currently with few market players& DeFcor aims to be in the top 3 LRT protocols which is an easy-to-use platform even for non-degen users.
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