One of the most well-known liquid-staking platforms, Lido, saw 10,000 unique ETH depositors choose to join the protocol, helping to push total value locked (TVL) above a historic threshold of $15 billion worth of tokens in July, a number not seen since May 2022.
According to Lido’s monthly report, there were over 166,000 unique ether depositors last month, an increase of 6.66%. As of press time, Lido’s TVL is $14.81 billion, down from $15 billion on July 14 as a result of the recent fall in the price of ether.
The rise in both metrics coincides with a decline of more than 53% to roughly 161,000 in the amount of staked ETH (stETH) in decentralised finance (DeFi) liquidity pools.
Liquidity, which determines how easily crypto investors may access stETH, is often where DeFi traders focus their attention.
According to Kasper Rasmussen, Lido marketing lead, “the uncertainty surrounding the Curve exploit/situation with many LPs [liquidity providers] withdrawing until there is more clarity” was the main cause of the decline in liquidity in DeFi pools.
Following a recent attack that cost Curve Finance, a decentralised stablecoin exchange, approximately $73 million, other participants in the crypto ecosystem, including Lido, were affected. 73% of the monies that were taken have already been recovered by Curve.
The demand for stETH for lending protocols and layer 2 rollups is still high despite the decline in stETH in DeFi liquidity pools. Market participants want to bridge their LST to layer 2 rollups as well as use LST as collateral for loans, as shown by Aave holding over 736,000 stETH, according to Nansen, and “Arbitrum and Optimism bridges experiencing increases of 16.58% and 10.23% in wstETH deposits, respectively,” the report says.