HashKey Capital Expects LSDs to Dominate DeFi

HashKey Capital Expects LSDs to Dominate DeFi

HashKey Capital, one of the largest crypto funds in the world, just recently published its yearly analysis on the Liquid Staking Derivatives (LSD) market in the cryptocurrency industry. According to the findings of the study, the market for liquid staking derivatives has rapidly expanded, with a total value locked in that has surpassed $22 billion this year. 

Furthermore, according to information provided to Finbold on August 3rd, the total market valuation of all LSD projects has now surpassed the amount of $18 billion.

In spite of the bearish market mood that pervaded the entirety of the cryptocurrency industry in 2022, there has been a discernible uptick in the growth of LSD markets ever since the Ethereum Shanghai Upgrade was released in April 2023. 

The LSD industry was still able to make headway in 2022 despite the adverse market conditions, and shortly after the upgrade was implemented, the TVL for the LSD market increased by more than 15% in just two short months.

An in-depth investigation was carried out by the senior researcher at HashKey Capital, Henrique Centieiro, with the goals of determining the current state of the LSD subsector of the cryptocurrency exchange market, predicting its future growth, examining current market trends, and identifying significant rivals in the industry. 

HashKey’s research team, which is led by Jupiter Zheng and is excited about the bright future of the LSD market, is hopeful about the market’s future.

The research unearthed a number of fascinating facts about the LSD (Liquid Staking Derivatives) market. For example, the value of Ethereum has skyrocketed to an astonishing over $100 billion and demonstrates the potential to become a gigantic $1 trillion industry. 

Since the upgrade in April, more than three billion dollars’ worth of total value locked (TVL) has been added, which demonstrates the enormous potential of Ethereum. 

A staggering 140 million dollars’ worth of ether being staked every day on the main chain by users. Since the Shanghai upgrade was implemented, the typical monthly ETH stake has also experienced amazing development, with its value increasing by more than four times what it was before the upgrade was implemented.

The projections of Zheng’s group suggest that within the next few years, staked ETH will account for 45 percent of the total quantity of circulating ETH, which would equal hundreds of billions of dollars. At this time, the total market valuation of all ETH that is currently in circulation is greater than $226.2 billion.

Henrique forecasts that the growing popularity of ETH staking will result in a rapid development of LSDs, eventually surpassing both native staking and centralized exchange staking because of its better reward potential. 

This will occur because investors are increasingly seeking the benefits that it offers.

LSDfi will keep getting bigger.

In addition, the research suggests that LSDfi is going to grow more popular within the LSD sector as a result of its one-of-a-kind benefits. 

These benefits include the provision of new liquidity choices, the promotion of decentralization, the enhancement of security, and the delivery of higher returns. 

According to the projections made by HashKey, the LSDfi industry will eventually overtake decentralized exchanges in terms of total value locked (TVL), and it will go on to become the most important component of the DeFi ecosystem.


About Ylleza Jashari

Senior student pursuing a degree in Security Studies at Rochester Institute of Technology. In my role as a Content Writer at Walletor, my primary objective is to develop informative content that effectively educates all Walletor users on the most up-to-date insights pertaining to financial transactions, digital wallets, and the broader cryptocurrency industry.

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