1. BITBILIHome
  2. Article

HashKey Capital predicts explosive growth for liquid staking derivatives in DeFi

• 197 views

TL;DR Breakdown

  • HashKey Capital has released its annual report on the DeFi Liquid Staking Derivatives market, pointing to a  $22 billion growth in the LSD market’s total value locked.
  • The research team at HashKey, managed by Jupiter Zheng, notes that Ethereum staking is currently a $100 billion-plus opportunity with the potential to become a $1 trillion market in the near future.
  • HashKey’s team predicts that the percentage of staked ETH will more than double in the next years, accounting for 45% of the crypto’s total circulating supply.

Description

HashKey has had a good day in the last 24 hours with bagging the first crypto exchange license under Hong Kong’s new crypto regime. That is not all. The Capital arm, according to a document shared with Cryptopolitan, predicts that DeFi markets stand to gain advantageously from liquid staking derivatives. HashKey Capital’s Bold Prediction HashKey … Read more

HashKey has had a good day in the last 24 hours with bagging the first crypto exchange license under Hong Kong’s new crypto regime. That is not all. The Capital arm, according to a document shared with Cryptopolitan, predicts that DeFi markets stand to gain advantageously from liquid staking derivatives.

HashKey Capital’s Bold Prediction

HashKey Capital, one of Asia’s largest and most prominent crypto funds, has released its annual report on the DeFi Liquid Staking Derivatives (LSD) market. Among the findings, it was determined that the LSD market’s total value locked surpassed $22 billion this year, while the total market capitalization of all LSD initiatives surpassed $18 billion. 

Although the broader crypto market has struggled to shrug off the bear market sentiment that dominated the industry in 2022, the growth of LSD markets has exploded since the April 2023 launch of Ethereum‘s Shanghai Upgrade. According to the report, the LSD market’s TVL increased by more than 15% in the subsequent two months.

As witnessed by crypto investors and echoed by HashKey Capital, Ethereum’s Shanghai Upgrade was the most significant modification to DeFi’s most dominant network since the Merge in 2022, when it migrated to a proof-of-stake consensus mechanism. Ethereum benefited from Shanghai’s changes to the EVM object format, the introduction of Beacon Chain withdrawals, and the reduction of L2 transaction fees. 

Details addressed in HashKey’s report

Henrique Centieiro, a senior researcher at HashKey Capital, authored the LSD report and set out to evaluate the status of this segment of the DeFi market, forecast its future growth, analyze current market patterns, and identify its key players. The research team at HashKey, managed by Jupiter Zheng, predicts a bright future for LSD investors. 

The report provided several intriguing insights into the LSD market, noting that Ethereum staking is currently a $100 billion-plus opportunity with the potential to become a $1 trillion market over the long term. 

This potential is demonstrated by the fact that Ethereum users stake an astounding $140 million worth of Ether per day on the main chain, with over $3 billion in TVL added since the April upgrade. HashKey discovered that the average monthly staking inflow for ETH has quadrupled in value since the introduction of Shanghai. 

Even more exciting, every piece of data suggests that this trend will accelerate. According to Zheng’s team, the percentage of staked ETH will more than double in the next years, accounting for 45% of the cryptocurrency’s total circulating supply, worth hundreds of billions of dollars. ETH had a total market cap of more than $226.2 billion at the time of writing. 

According to Henrique, the increased interest in ETH staking will result in rapid expansion LSDs, displacing native staking and centralized exchange staking as investors seek larger return potential. However, the paper emphasizes that LSD is still a young and developing sector and that developing protocols will overtake the more established protocols that are currently dominating. 

In the future, any rational actor with have 100% of his or her ETH staked in LSDs […] Further implementation of the EIP-4337 standard allows fees to be paid with ERC-20 tokens, effectively making the strategy of holding ETH redundant.

Henrique Centieiro

According to the research, Rocket Pool has been the fastest-growing LSD protocol in recent months, stealing market share from more well-known companies such as Coinbase‘s cbETH. According to the report’s authors, this development demonstrates how much the DeFi community values decentralization. 

What are Liquid Staking Derivatives?

Liquid staking derivatives are the newest trend in the decentralized finance (DeFi) industry, providing a new method to earn yield on crypto assets. Due to the lockup nature of ETH, Liquid Staking was developed to enable users to receive a receipt token for staking ETH with a liquid staking provider. 

This receipt token is also referred to as a Liquid Staked Derivative (LSD). LSD is a liquid token similar to the vast majority of other crypto tokens in that it is entirely fungible, transferable, fractional, etc. 

HashKey Capital predicts explosive growth for liquid staking derivatives in DeFiHashKey Capital predicts explosive growth for liquid staking derivatives in DeFi

LSDs unlock the liquidity of your staked ETH because they have the same value as the staked ETH that is momentarily locked. Using the LSD token enables you to indirectly use staked ETH in DeFi activities such as selling, providing liquidity, lending it as collateral, etc., in order to earn an additional yield on top of the staking yield. 

HashKey warns that as more investors enter the market, staking yields will fall. However, the compatibility of LSD with DeFi means that investors have additional chances to increase their total yields. 

Validator networks are likely to become even more democratized and decentralized in the future as new developments, such as Distributed Validator Technology, are introduced. According to HashKey, this will result in a rush of new opportunities for developers, investors, and crypto consumers alike. 

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

文章来源于互联网:HashKey Capital predicts explosive growth for liquid staking derivatives in DeFi

Disclaimers:

1. You are solely responsible for your investment decisions and this info is not liable for any losses you may incur.

2. The copyright of this article belongs to the writer, it represents the writer's opinions only, not represents the site's ones. Not financial advice.

Previous 2023年8月4日 04:05
Next 2023年8月4日 05:53

Related articles

  • Gemini and Genesis File Motion to Dismiss SEC Lawsuit

    TL;DR Breakdown Gemini and Genesis jointly filed a motion to dismiss the SEC lawsuit against their “Earn” product, which offered yields to customers against their crypto deposits. The crypto exchange aims to recover over $1.1 billion in assets for approximately 232,000 Earn users affected by Genesis’ bankruptcy. The companies are engaging in mediated negotiations and collaborative restructuring to find a resolution. Gemini, a prominent cryptocurrency exchange, and Genesis Global Capital, a bankrupt crypto lender, have jointly filed a motion to dismiss the Securities and Exchange Commission’s (SEC) lawsuit against their “Earn” product. The lawsuit alleges that Gemini Earn, a service that allowed customers to earn yields on their crypto deposits, violated securities regulations by offering unregistered securities.  Gemini and Genesis have argued that Gemini Earn should not be classified as a security, asserting that the transactions were essentially loans. In their legal filings, the companies are seeking the dismissal of the complaint or, alternatively, the removal of the SEC’s requests for a permanent injunction and disgorgement. Contents hide 1 Challenging the Classification of Gemini Earn 2 Mediated Negotiations and Collaborative…

    Article 2023年5月29日

  • The rise of BRICS and why it’s attracting more countries

    TL;DR Breakdown BRICS, an alliance of Brazil, Russia, India, China, and South Africa, has grown from a concept to a formidable global entity. Initially conceived by Goldman Sachs in 2001, the BRICS countries have leveraged their shared growth trajectories and challenges to amplify their global influence. The establishment of the New Development Bank and the Contingent Reserve Arrangement has positioned BRICS as an attractive alternative to traditional financial institutions like the IMF and World Bank. The ascendency of BRICS, an acronym for the emerging economies of Brazil, Russia, India, China, and South Africa, has captured global attention. A concept once borne out of an investment bank’s observation has grown into a formidable alliance, leading a new direction for the world economy. This development has attracted interest from various nations, marking a significant shift in the global financial and political landscape. The growth trajectory The original concept of BRICS was forged by economist Jim O’Neill of Goldman Sachs Group Inc. in 2001, who identified Brazil, Russia, India, and China as countries exhibiting impressive economic growth rates. Despite the widespread skepticism, these…

    Article 2023年6月1日

  • UK economy contracts more than expected, pound falls

    TL;DR Breakdown The UK’s economy contracted more than anticipated in July, with a 0.5% drop in gross domestic output. In response to the economic contraction, the pound saw a 0.4% decline against the dollar. The Bank of England is grappling with a UK economic slowdown due to a surge in borrowing costs, prompting policymakers to reconsider increasing interest rates. Description The UK’s economy shrank more than anticipated in July, indicating a slowdown in activity amid tightening measures by the Bank of England (BoE). In response, the pound saw a 0.4% decline against the dollar, reaching $1.2449. Additionally, the euro gained 0.2% against the pound, approaching its highest level in a month at 86.27 pence. The … Read more The UK’s economy shrank more than anticipated in July, indicating a slowdown in activity amid tightening measures by the Bank of England (BoE). In response, the pound saw a 0.4% decline against the dollar, reaching $1.2449. Additionally, the euro gained 0.2% against the pound, approaching its highest level in a month at 86.27 pence. The data suggests ongoing economic volatility and highlights…

    Article 2023年9月14日

  • Digital dollar favors banks and govts over people

    TL;DR Breakdown The digital dollar was once seen as a tool for financial inclusion but failed due to implementation challenges. A wholesale digital dollar is emerging, focusing on rapid global payments among big financial institutions. This innovation favors banks and governments, not the general populace, aligning with power and control rather than individual empowerment. Description A forgotten dream, once cradled by the embrace of cryptocurrency enthusiasts and governmental advocates, stirs once again in the shadows. The concept of the digital dollar, an idea that once swept Washington off its feet, but was later left abandoned at the altar of failed financial innovation, is stirring once more. But this time, the … Read more A forgotten dream, once cradled by the embrace of cryptocurrency enthusiasts and governmental advocates, stirs once again in the shadows. The concept of the digital dollar, an idea that once swept Washington off its feet, but was later left abandoned at the altar of failed financial innovation, is stirring once more. But this time, the game has changed. This isn’t about financial inclusivity or crypto glam; it’s…

    Article 2023年8月5日

  • Crypto report shows strong optimism about growth in the future

    TL;DR Breakdown A crypto report has shown that asset managers still believe that crypto will grow drastically in the future. Market challenges and preparation for future growth. Description Despite enduring the crypto winter, a notable number of asset managers, hedge funds, and investors are anticipating substantial growth in the digital assets sector over the next five years, according to a crypto report by Coalition Greenwich. The crypto report, conducted through interviews with 60 professionals, including portfolio managers, traders, analysts, researchers, and managing directors … Read more Despite enduring the crypto winter, a notable number of asset managers, hedge funds, and investors are anticipating substantial growth in the digital assets sector over the next five years, according to a crypto report by Coalition Greenwich. The crypto report, conducted through interviews with 60 professionals, including portfolio managers, traders, analysts, researchers, and managing directors in the United States, the United Kingdom, and the European Union, provides insights into the industry’s outlook and strategies. Coalition Greenwich crypto report reveals key statistics The research, led by senior analyst David Easthope, reveals that 48% of the…

    Article 2023年9月25日
TOP