As data shows a steady decline in locked assets, staking yields may reduce investors’ incentive to use other DeFi protocols.
A series of failures of centralized cryptocurrency exchanges and services over the past year have not prevented continued outflows from decentralized finance (DeFi), data shows.
According to DefiLlama, there is less than $38 billion in value locked in cross-chain DeFi protocols, down from $178 billion at the industry’s peak in November 2021, of which nearly $21.8 billion is currently held in the Ethereum protocol.
The overall figure is even lower than the total value locked (TVL) in DeFi of about $40 billion shortly after the collapse of centralized exchange FTX in November 2022, causing the number of many assets locked in such protocols to fall to a two-year low. Centralized cryptocurrency lenders including BlockFi, Genesis, and Gemini Earn also collapsed amid the surrounding contagion.
Although TVL rebounded to around $50 billion in April as the market recovered, the metric quickly fell back below $38 billion, despite a relatively small decline in the value of its underlying cryptocurrencies during that period.
The $37.6 billion figure does not include funds locked in popular liquidity staking protocols like Lido, which has more than doubled its TVL from $6 billion to $13.95 billion since the FTX debacle. As DeFiLlama points out, such protocols are “deposited into another protocol” and therefore are not included in this count.
Likewise, Coinbase’s staking service has amassed an additional $2.1 billion worth of ETH since its launch in September 2022. Overall, such services alone contain another $20.2 billion in assets.
Liquid staking allows investors to stake their assets and earn yield while still having access to trading liquidity through pegged assets issued by staking providers, such as cbETH and stETH.
For investors, this may be a more attractive option than using a lending protocol like Aave, which forces users to lock up their tokens and potentially expose themselves to unnecessary protocol risk. Currently, Aave’s ETH and USDC yields are 1.63% and 2.43%, respectively, while Coinbase’s ETH staking rate is 3.65% and USDC yields 4.5%.
Aave’s total value locked has fallen 21% to $4.5 billion over the past month, while Curve Finance’s has fallen 26% to $2.3 billion.
Outside of DeFi, the Fed’s hawkish monetary policy has pushed up yields on short-term government debt, which may be more attractive to investors than the yields on stablecoins. #以太坊 #质押