Data from Glassnode shows the demand for Lido Staked Ethereum (stETH) has observed a sharp 142% growth since May 2022.
Demand For stETH Has Far Surpassed That Of Ethereum Since LUNA Collapse
Since the arrival of proof-of-stake (PoS) on the Ethereum blockchain, liquid staking projects have cropped up, which let users stake their ETH through them, and in return, they receive tokens called liquid staking derivatives.
With these derivatives, users can continue to earn staking rewards while still having mobility over their ETH, meaning they can participate in other DeFi activities with them. This makes the prospect of staking this way more lucrative for many investors.
The largest platform in the sector is Lido, which provides its users with stETH as a representation of the coins they have staked with the platform. In its latest weekly report, the on-chain analytics firm Glassnode has looked into the impact this derivative token may have on Ethereum.
The trend in the composition of the ETH supply over the past few years | Source: Glassnode's The Week Onchain - Week 40, 2023
From the above chart, it’s visible that a total of 23% of the Ethereum supply is locked inside the staking contract. Of this staked ETH, 32% is through the Lido platform, equivalent to 7% of the total circulating supply.
As staking through Lido means locking ETH in…
