Lido Finance, a leading liquidity staking protocol, has experienced an impressive rise in its Total Value Locked (TVL) following the activation of the Shanghai upgrade on the Ethereum blockchain. Within less than 24 hours, Lido Finance has added more than $1.1 billion, representing around 10% of the total TVL, which now stands at over $12.6 billion.
Ethereum’s full transition to a proof-of-stake blockchain with the Shanghai upgrade has allowed stakers and validators to withdraw their coins, leading to a surge in asset inflow to the DeFi sector. The recent upgrade resulted in the unlocking of over $30 billion of ETH that was previously locked in the beacon chain.
The more than $1 billion addition means Lido Finance’s TVL is up 24% in the last trading month and approximately five percent in the last 24 hours. This puts Lido Finance ahead of other DeFi protocols, including MakerDAO, Aave, Curve, and Uniswap.
LDO Token on the Rise
With DeFi users seemingly moving their coins to Lido Finance, the governance token of the liquidity staking protocol, LDO, has also risen. Since the critical upgrade on Ethereum on April 13, LDO prices have increased by roughly 7%, peaking at around $2.6 on April 14 before retracing to spot levels. However, the token is up 23% from March 2023 lows and has rallied 175% from December 2022 lows, outperforming bitcoin (BTC) and ethereum (ETH).
DeFi and Asset Prices Recovering
The upswing in top DeFi dapps’ TVL coincides with a spike in asset inflow to the sector, with users locking over $53.4 billion of various assets as of writing. This is a near 40% increase from January lows when the sphere’s TVL stood at approximately $38.8 billion.
After experiencing falling assets from late Q4 2021 throughout 2022, DeFi activity suffered from tough regulations on trustless protocols and hacks. However, the recent surge in asset inflow and TVL signals a strong recovery for the DeFi sector, which stood at over $175 billion during the last bull cycle, with Ethereum being the dominant network.
Lido Finance’s impressive rise in TVL following the Ethereum upgrade highlights the platform’s strength as a leading liquidity staking protocol. With LDO token prices on the rise and asset inflow to the DeFi sector increasing, it is clear that the sector is experiencing a strong recovery. As DeFi protocols continue to evolve, it will be interesting to see how the sector will fare in the future.
