The total value of assets locked (TVL) in liquid staking derivatives (LSD) protocols rose to $14.09 billion — making it the second-largest DeFi category, according to Defillama data.

The DeFi category usurped lending protocols with a TVL of $13.68 billion and sat behind only decentralized exchanges (DEX) whose TVL is at $19.33 billion, according to DeFillama data.

Liquid staking protocols allow users to earn staking rewards while providing them liquidity for other crypto-based activities. Examples of this protocol include Lido, Frax Ether, Rocket Pool, etc.

With Ethereum’s Shanghai upgrade expected to allow stakers to withdraw their staked ETH, liquid staking protocols have enjoyed renewed interest from community members.

Besides that, recent US regulatory actions against centralized staking service providers have given these protocols an edge against their centralized rivals.

DeFillama data shows that over 7 million ETH tokens have been staked via these platforms, with Lido dominating 75% of the space. Other DeFi protocols like Rocket Pool and Frax Ether have recorded notable growth over the past month.

Meanwhile, the interest in these protocols has positively affected their governance tokens. Lido’s LDO rose over 200% in the current year, beating the price performance of flagship digital assets like Bitcoin (BTC) and Ethereum (ETH), according to CryptoSlate’s data.

The post Liquid staking TVL now second-largest among DeFi protocols appeared first on CryptoSlate.