Ethereum Now Featured Twice in Crypto Top 10 — Thanks to Lido

Paxos has burned so much BUSD that Lido staked ETH is now the tenth largest crypto by market cap


WindAwake/ modified by Blockworks


Ethereum now commands two out of the top 10 market cap spots, after the premiere ETH staking derivative flipped Binance’s stablecoin earlier this week.

Lido Staked ETH (stETH) is now worth more than $10 billion, per CoinGecko, eclipsing Binance USD (BUSD), which now has only $8.4 billion in circulation.

BUSD had about double that at the start of the year, ranking it in seventh place, slightly behind XRP. 

Its issuer Paxos has faced compounding redemptions after a Wells notice from the SEC claimed the stablecoin represents an unregistered securities offering.

Click play to watch stETH flip BUSD and enter the top 10 | Chart by David Canellis

Like other liquid staking providers, Lido allows ether holders to stake their ETH in return for a separate derivative token, stETH. 

Staking directly to the Ethereum blockchain without services such as Lido requires 32 ETH ($56,500) to operate a staking validator node. All staked ether cannot be withdrawn until the network’s next big upgrade, Shanghai, goes live next month.

StETH turns ETH staked via Lido into an immediately liquid asset, which can either be traded on crypto exchanges, lent out or used as collateral for loans across DeFi protocols. 

The token is backed by ether locked in staking, but its price isn’t directly pegged; stETH has wavered from ETH parity at times.

Lido also automatically pays stETH holders daily staking rewards passed down from the Ethereum blockchain. There’s currently just shy of 5.6 million ETH ($9.9 billion) staked inside Lido’s protocol (excluding interest), according to Nansen, up 150% from around 2.3 million ETH ($4.1 billion) one year ago. Etherscan shows more than 171,000 wallet addresses hold stETH.

Meanwhile, ether dominance — which measures how much of the crypto market is ETH — hovers a touch under 20%, while bitcoin dominance is almost 46%.

Ether liquid staking derivatives find product-market fit 

In any case, ether staking derivatives like stETH have exploded in popularity in recent months, making the best of the lengthy lockup periods associated with participating in Ethereum 2.0 consensus.

The earliest ETH stakers locked their tokens in the proof-of-stake Beacon Chain back in Nov. 2020, when ether was less than $450. 

ETH has since rallied as much as 1,000%, reaching a high of $4,878 one year after the Beacon contract went live, before dropping 64% to under $1,800 today.

ETH goes up and down, but the number of ETH staked in consensus can only increase (for now)

More than 17.6 million ETH ($31.3 billion) has been staked, representing nearly 15% of the circulating supply overall.

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