Lido Finance Becomes The Biggest Decentralized Finance Protocol

Lido Finance has pushed back MakerDAO to become the largest DeFi protocol operating in the crypto industry with a total value locked (TVL) of up to $5.9 billion on its staking forum.

MakerDAO, the top decentralized protocol for lending, has lost its control in the market of decentralized finance (DeFi). This is so as Lido Finance (a protocol for liquid staking) occupied the peak place with maximum total value locked (TVL).

Lido Finance Outpaces MakerDAO with Its TVL Reaching the $5.9 Billion Mark

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As per data provided by DeFiLlama (an aggregator of the DeFi market), Lido Finance at present contains a $5.9B worth in total value locked. After that, MakerDAO is now placed in the 2nd position with a $5.89B value.

Then comes AAVE at the 3rd place with $3.7B as its TVL. The rise in the TVL of Lido has been credited to the huge upsurge in demand related to the staking solutions on Ethereum.

As per the recent report from Nansen, the Merge upgrade of Ethereum paved the way for mounting demand for these solutions. The respective upgrade transitioned the network’s consensus mechanism from proof-of-work (PoW) to the new proof-of-stake (PoS).

Lido Finance has taken advantage of the opportunity to fortify its status within the market. Consequently, it has now come to the front as the prominent DeFi protocol.

According to the report from Nansen, Lido presently possesses the maximum worth of ETH tokens staked on it. This value equals nearly a 31% ratio. This is a considerable dominance level in comparison with prominent exchanges, taking into account Kraken and Coinbase.

These entities occupy 8.5% and 15% proportions respectively. As per the formal website of the protocol, Lido Finance presently has staked ETH tokens of approximately $43.9 million worth on Polygon.

On the other platforms including Kusama, Polkadot, and Solana, it has $2.2 million, $11 million, and 23.2 million worth. In 2022’s November, Lido stated that it has been gathering up to $1 million worth in fees on regular basis since October. In the meantime, MakerDAO protocol of Maker saw that its revenue plunged to just more than $4M in the 3rd quarter of the previous year.

TVL of DeFi Sector Records Enormous Crash

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This counted for approximately eighty-six decline as compared with the former quarter, as mentioned in a Messari statement issued in 2022’s September. At that time, a reference was made to some liquidation issues as well as a fading demand to be the possible causes credited for the drop.

The decentralized finance (DeFi) world saw an enormous drop in terms of TVL during 2022. In this way, it lost almost seventy percent of its cumulative value.

In January 2022, the slump took the value from $167 (recorded in January) to $38.6 as of now. A significant contribution in this respect has been made by the growing cybercriminals and hacks in the DeFi sector.

Such unfortunate incidents shook the whole industry and the entire sector went through a great plunge. As the reports brought to the front, the DeFi protocols experienced the maximum losses during the previous year.

The biggest of all the hacks was the Ronin bridge exploit. In that exploit, the hackers stole digital assets of more than $620 million value. Though the DeFi yields are still pressurized throughout the world, the industry has expressed extraordinary flexibility and endured the prolonged crypto winter.