The number of validators who came to the Ethereum blockchain through Lido Finance has reached 1 million people. We tell you what this means for the decentralized finance (DeFi) segment
To become a node operator on Ethereum and take part in ETH staking, you need to deposit at least 32 ETH. However, Lido makes this process more accessible to a wider audience, allowing smaller amounts to be invested.
The number of Lido users is growing…
Lido Finance is the largest player in the decentralized finance (DeFi) sector. This platform allows retail clients to participate in staking by investing less than 32 ETH. Recently, the developers reported that the liquid staking protocol has become the largest on Ethereum. Developed
Dune data shows that over 27.16% of Ethereum's total supply is currently staked, predominantly through platforms like Lido, largely due to the benefits of liquid staking protocols. Unlike traditional staking, where assets remain locked, users receive Lido Staked ETH (stETH) tokens in return, which can be staked on other DeFi protocols, increasing liquidity.
Read also: What is Ethereum staking and how to make money from it
With Lido you can engage in staking without locking up large amounts of capital. The platform currently accounts for 28.5% of Ethereum staking. For comparison, the same indicator for the Coinbase crypto exchange is 13.6%.
… and TVL decreases
However, the total value of assets locked in the protocol (TVL) has fallen by about 25% from a high of $40.16 billion in mid-March to $29.78 billion.
TVL Lido. Source: DefiLlama
This reduction reflects a broader trend in the DeFi sector, where the total value of locked assets fell from $97 billion (the peak reached in April 2024) to $92.22 billion.
Despite the decline, the sector continues to grow, primarily due to the adoption of liquid staking and re-staking protocols such as EigenLayer.
Meanwhile, Lido's recent TVL decline calls into question the long-term sustainability of DeFi's rapid growth. In 2022, Forbes compared DeFi staking mechanisms to Ponzi schemes, pointing out their dependence on a constant influx of new investment to maintain value.
“Since most participants are also involved in staking, the reward for staking is tantamount to token inflation, which leads to a decrease in the price. [Therefore] there must be a significant increase in the number of new investors in the ecosystem to compensate for the growing supply. Because the ecosystem relies on new investors to maintain value, it is similar to other Ponzi schemes,” Forbes analysts say.