Lido Finance adds over $1b in less than 24 hours after Ethereum upgrade

Lido Finance, a liquidity staking protocol supporting the various protocols, including Ethereum and Solana, remains the most dominant decentralized finance (DeFi) application as of April 14.

Lido Finance’s TVL rising

The total value locked (TVL) on Lido, a measure of all assets managed by a dapp, stood at over $12.6 billion. 

Notably, less than 24 hours after the activation of the Shanghai upgrade on the Ethereum blockchain, Lido Finance has added more than $1.1 billion, representing around 10% of the total TVL. 

With the Shanghai upgrade, Ethereum fully transitioned to be a proof-of-stake blockchain, permitting stakers and validators to withdraw their coins. Before this update, over $30 billion of ETH had been 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 roughly five percent in the last 24 hours. 

At this pace, it means Lido Finance is galloping ahead of other DeFi protocols, including MakerDAO, a decentralized money market; Aave, a lending protocol; Curve, a stablecoin decentralized exchange; and Uniswap, one of the leading decentralized exchanges that recently launched on the BNB Chain. 

DeFi and asset prices recovering

With DeFi users appearing to move their coins to Lido Finance, LDO, the governance token of the liquidity staking protocol, also rose in tandem. 

Since the critical upgrade on Ethereum on April 13, LDO prices are up 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 more than tripled, rallying 175% from December 2022 lows.

At this pace, LDO has outperformed bitcoin (BTC) and ethereum (ETH), both of which have also posted decent gains from 2022 lows.

Overall, the upswing in top DeFi dapps’ TVL coincides with a spike in asset inflow to the sector. When writing on April 14, users had locked over $53.4b of various assets, a near 40% increase from January lows when the sphere’s TVL stood at approximately $38.8b. 

Falling assets from late Q4 2021 throughout 2022, partly combined with tough regulations on trustless protocols and hacks, decimated DeFi activity. During the last bull cycle, DeFi TVL stood at over $175 billion, with Ethereum being the dominant network.