Liquidity restaking tokens market up 8,300% amid demand for ‘user-friendly instruments’

The total value locked in liquidity resting tokens has increased by more than 8,000% since the beginning of the year as investors seek efficient financial instruments.

The LRT market has skyrocketed by 8,300% this year, from $164 million to nearly $14 billion. This reflects a rapidly accelerating shift toward more user-friendly financial instruments in the crypto landscape, according to a research report shared with crypto.news by crypto venture capital firm Node Capital.

Total value locked in liquid restock tokens | Source: Dune

Analysts attribute this dramatic increase to the fact that traditional staking protocols are struggling to keep up with the increasing demand, and LRTs are now gaining a noticeable market share. The VC firm notes that non-custodial delegated staking protocol Ether.fi (ETHFI) is leading the surge, with over 50% of the LRT market.

Protocols take advantage of arbitration opportunity

Or Harel, token engineering analyst at Node Capital, suggests that the dramatic increase in LRT adoption can be attributed to the fact that large liquid re-staking protocols have recognized the hype and are “taking advantage of this technical arbitrage opportunity.”

Liquid staking protocols by market share | Source: Token Terminal

“In a short period of time, these LRPs have accumulated billions of dollars of stakeholder capital and positioned themselves as key supply-side enablers by establishing advanced operator infrastructure,” he added.

But analysts at Node Capital are also expressing growing concerns about centralization. As user preference shifts toward convenience, centralized solutions like Lido are gaining traction, and “their dominant market share is creating a new form of centralization.” According to data from Token Terminal, Lido Finance (LDO) has allocated more than $33 billion in crypto to staking through June, surpassing EigenLayer, which manages around $20 billion.