Key Takeaways
How’s Lido standing in the liquid staking sector?
It controls about 23% market share with 8.5 million staked ETH.
Will the staked ETH outflows affect the price?
Most likely, especially if ETFs or treasury fails to absorb it.
The recent approval of the Ethereum [ETH] ETF staking renewed market interest in liquid staking.
In return for staked ETH, the liquid staking platforms offer deposit receipt tokens that represent your stake. The tokens also offer liquidity for other activities without necessarily withdrawing your stake.
Lido [LDO] had a tremendous market share in the past, but its moat has since eroded amid calls for diversification to mitigate centralization risk. As of writing, it still held the top market share, but only at about 23% (8.5 million staked ETH) compared to nearly 70% earlier in the year.
Source: Dune
Binance [BNB] came in second, with about 9% (3.3 million staked ETH), and Coinbase closed the top three list with a 6.8% (2.4 million ETH) market share.
Overall, approximately 36 million ETH has been locked up in validators, accounting for 29% of the overall supply.
Staking outflows persist
However, despite the record interest in ETF staking, there have been more Staked Outflows since mid-October.
Source: Dune
In fact, the overall queued Ethereum waiting to be unstaked surpassed the entry line. About 1.5 million ETH were on the entry list, while 2.4 million ETH are expected to exit in the next 42 days.
That would leave nearly 1 million ETH that could hit the market, assuming they aren’t deployed elsewhere. That could likely be a selling pressure overhang.
Source: Validator Queue
Additionally, ETF inflows have weakened. Glassnode data confirmed that cumulative Spot ETH ETF demand fell from about 300,000 ETH in late September to 27,000 ETH by early November.
Source: Glassnode
If the pace of the ETF trend persists in the next 42 days, then the unstaked ETH could further drag the market.
Ethereum’s market structure turns cautious
Meanwhile, the altcoin was trading at $ 3,800 as of writing. The price momentum was bearish, and losing the $3.8k short-term support would embolden sellers to drag it down to $ 3.2k-$3.4k.
Source: ETH/USDT, TradingView
On the other hand, bulls could only regain the market edge if they convincingly push above $4,200.
In summary, Lido remained the dominant player in the liquid staking market. But the queued staked ETH waiting for exit could become a supply overhang if not fully absorbed by ETFs or treasury firms.