Lido's Total Value Locked spiked by 78% in 2023, here's why

Lido's TVL in DeFi has increased by a whopping 78% since the beginning of 2023, and 13% since the beginning of March 2023.

20 MAR 2023, 2 min read

With the highly anticipated Ethereum Shanghai Capella Upgrade on the mainnet set for April 12, 2023 - liquid staking behemoth Lido Finance has witnessed a significant jump in its total-value-locked in DeFi. Lido is the biggest decentralized finance protocol, and is garnering a lot of attention of late as Ethereum 2.0 stakers look forward to the potential unlocking of their staked tokens on the deposit contract after more than two years since it first began back in December 2020.

According to data from DeFi data aggregator, DefiLlama, Lido's TVL has increased by a whopping 78% since the beginning of 2023, and 13% since the beginning of March 2023. Interestingly, post the brief depegging of the USDC stablecoin, Lido's TVL did see a dip but quickly recovered a hefty 25% from the local lows.

Currently, as of writing, Lido protocol's TVL is standing at $10.44 billion, which accounts for a little over 21% share of the entire decentralized finance (DeFi) ecosystem.

Read more: Ethereum Shanghai Upgrade Date

ETH stakers seem to prefer Lido

In the last couple of months, ever since the collapse of the FTX crypto exchange back in early November 2022, Lido did see a significant plunge in its TVL numbers. Thanks to the FTX collapse, we even saw Lido's share of the ETH staking market dropping below 30% for the first time since April 2022.

But since then, Lido has managed to recover both in terms of market capitalization through its native crypto token, LDO, and also at the same time in terms of TVL, rallying above the 30% mark since the beginning of March.

With the news of the successful execution of the Shanghai Capella hard fork on the third and final Goerli testnet, Lido saw a strong recovery in momentum and TVL. And with the April 12 date finalized at the recent Ethereum All Core Developers Execution (ACDE) Call that happened on March 16 - the overall optimism around the protocol has increased even more.

According to data from Nansen crypto analytics and tracking platform, Lido has a little over 5.59 million ETH tokens staked through it, representing a solid 31%+ market dominance in the liquid staking sector.

ETH deposited through Lido Finance | Source: Nansen.ai

The Shanghai hard fork has been so highly anticipated ever since the Ethereum Merge which went live last year on September 15, because it will effectively transition the Ethereum network from a proof-of-work (PoW) ecosystem to a fully functioning proof-of-stake (PoS) ecosystem. The Shapella upgrade will also consist of the EIP-4895, which will enable the unlocking of staked ETH tokens from the Beacon chain.

The target slot for the upgrade has been set for epoch 6209536, on April 12 at about 10:27 pm UTC, or April 13, at 3:57 am IST. This upgrade had initially been set for the month of March 2023 but Ethereum developers later had to push it to April due to some delays caused during the Sepolia testnet upgrades.