Lido, one of the most popular liquid-staking platforms, saw a surge in activity this past month. 10,000 unique Ether (ETH) depositors opted into the protocol, contributing to a total value locked (TVL) of $15 billion, a level not seen since May 2022. According to a monthly report by Lido, the number of unique Ether depositors surpassed 166,000, representing a 6.66% increase.
Despite the decrease in stETH in DeFi liquidity pools, the demand for stETH remains strong for lending protocols and layer 2 rollups. Market participants not only want to back their loans with LST collateral, they also are looking to bridge their LST to layer 2 rollups. Aave is holding over 736,000 stETH, and Arbitrum and Optimism bridges experienced increases of 16.58% and 10.23% in wstETH deposits, respectively.
Kasper Rasmussen, Lido marketing lead, attributed the drop in liquidity in DeFi pools to the uncertainty surrounding Curve exploit/situation with many LPs [liquidity providers] withdrawing until there’s more clarity. Curve Finance, a decentralized stablecoin exchange, lost more than $73 million in a recent hack, causing spillover effects to other entities in the crypto ecosystem, including Lido. Curve has since recouped about 73% of the stolen funds.