- While Ethereum’s liquid staking gained popularity, its price remained below the $1,600 mark.
- Solana, on the other hand, recorded growth both in terms of LSTs and price action.
Messari recently published an analysis that provides insight into the current liquidity strike market. The analysis noted that 2023 was led by the rapid emergence of fluid expansion protocols, especially through Ethereum [ETH] and other emerging protocols within Solana [SOL] and Cosmos [ATOM].
Read Ethereums [ETH] Price prediction 2023-24
A look at the state of Ethereum in liquid staking
Recently, the vast majority of TVL’s liquid stakes reached an all-time high of $22 billion on Ethereum.
According to Messari’s recent repost, liquid staking has become Ethereum’s largest DeFi sector by far. Liquid staking tokens, and particularly Lido’s sETH, are becoming increasingly entrenched within Ethereum’s DeFi ecosystem, competing with native ETH.
Liquid staking is now Ethereum’s largest DeFi sector by far.
Furthermore, liquid staking tokens, and particularly Lido’s sETH, are becoming increasingly entrenched within Ethereum’s DeFi ecosystem, competing with native ETH. The monetary value of steTH competes with ETH because it inherits the value of ETH… pic.twitter.com/617WlwfvHY
— Messari (@MessariCrypto) October 10, 2023
In fact, almost 22% of all ETH has been staked, with Lido leading the way with a 32.2% market share.
According to Messari’s report, Lido accounts for almost 90% of everything ETH in derivative protocols for using liquids. Lido applies a 10% fee on all wagering rewards, with 5% provided to node operators and 5% received by the DAO treasury.
Lido’s performance was also reflected in its wstETH, as its supply grew from 1 million to 3 million since early 2023.
Source: Messari
In addition to Lido, Maker also recently announced the off-boarding of rETH-A into their main legacy vault by consolidating it into smaller vaults with lower costs.
The consolidation of voting power and staking options is a concern for the Maker community, even if it does not completely eliminate rETH exposure in DAI collateral vaults.
Ethereum’s performance is not good
As ETH’s liquid betting space reached new highs, Ethereum investors became concerned as the token’s price action turned bearish.
From CoinMarketCapETH is down more than 4% over the past seven days. At the time of writing, ETH was trading at $1,577.24 with a market cap of over $189 billion. Trading volume also declined along with the price, reflecting lower investor willingness to trade the token.
According to CryptoQuant it is ETHThe foreign exchange reserve also increased, indicating that high selling pressure could further depress prices in the coming days. However, the derived metrics looked optimistic as the funding rate was green.
Furthermore, Ethereum’s taker buy/sell ratio indicated that buying sentiment was dominant in the futures market.
Source: CryptoQuant
Solana’s liquid staking ecosystem is also growing
While Ethereum topped the table, other blockchains like Solana were also gaining momentum in the liquid staking space. It was interesting to note that despite 70% of SOL Currently, less than 3% has been staked on liquid staking.
One reason for this could be that the external DeFi landscape within Solana is still developing beyond its skeleton.
Additionally, Messari’s report stated that because Solana offers 7% APY for auto-staking, users are less likely to risk their SOL on liquid staking options in exchange for an additional 2-3% APY.
Source: Messari
TVL has doubled for Lido-Solana and Marinade since early 2023, indicating increased use of LSTs. Staked Solana (mSOL), owned by Marinade, accounts for 54% of Solend’s TVL.
Although LSTs are already the most sought-after loans on Solend, their total amount is insignificant compared to Ethereum.
The value of Solana has risen sharply in the past month
Like Ethereum, Solana’s weekly chart was also red. But a look at SOL’s monthly chart revealed that the price rose by more than 25%. At the time of writing, SOL was trade at $22.26 with a market cap of over $9.2 billion, making it the seventh largest crypto.
The token’s volume also increased significantly during the price surge, which was optimistic. The good news for investors was that a number of market indicators turned bullish, indicating that prices would rise in the following days.
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For example, SOL‘s Relative Strength Index (RSI) was above the neutral line. The Chaikin Money Flow (CMF) also registered an upswing and was heading towards the neutral line.
Solana’s Money Flow Index (MFI) was also relatively high. However, the MACD showed a bearish crossover, which could cause problems in the coming days.
Source: TradingView
