Newsletter 007

Liquid staking experiences explosive growth, plus ecosystem news & updates.

It’s been an explosive month of growth for liquid staking. The liquid staking sector is back near last year's all-time highs according to Bloomberg, with over 11M ETH in liquid staking today, and Liquid Collective has seen a 672% increase in staked ETH over the last 60 days alone.

You’ll have to check out today’s Liquid Collective By The Numbers section for more protocol stats, and read the Ecosystem News & Updates to learn why Bitcoin Suisse says that “the Liquid Staking sector absolutely dominates in all significant growth metrics.”

Read on for the latest resources from Liquid Collective, upcoming events, and more.

Liquid Collective's Latest

Correlated slashing: a case for diversification

Slashing, a primary risk of staking on Ethereum, is when a percentage of the ETH staked to a validator is programmatically seized from the validator for misbehavior. If more validators are slashed, the penalty per validator becomes worse.

This penalty factor means that correlated slashing, or the simultaneous slashing of multiple validators due to a shared point of failure or correlated misbehavior, presents an even steeper risk to stakers.

Our latest post explores how correlated slashing works, what measures can help to mitigate the risk of correlated slashing, the importance of diversified operators for mitigating correlated slashing risk, and Liquid Collective’s approach. Read it here.

Ethereum's Dencun upgrade: what's next for ETH and liquid staking

Ethereum's Dencun upgrade is expected to take place during Q4 of 2023. The EIPs, or Ethereum Improvement Proposals, slated for the Dencun upgrade may have significant impacts on the efficiency of liquid staking protocols and on Ethereum’s scalability as a whole.

We cover the EIPs that will be included in the upgrade along with their potential impact on Ethereum and liquid staking, including EIP-4844: Shard Blob Transactions and EIP-4788: Beacon block root in the EVM.

Read Liquid Collective's overview here to become a local expert on what the Dencun upgrade will mean for Ethereum.

Events

Professionalizing Liquid Staking and DeFi: Compliance, Security, and Coverage

• Wednesday September 27 2023 at 10:00 AM ET / 4:00 PM CET
• How can the liquid staking sector, and DeFi at large, continue to grow and professionalize? Join Liquid Collective for a virtual panel with guests from Spearbit, Nexus Mutual, Alluvial, Violet, and other teams to be announced. The discussion will highlight trends in new waves of institutional participation, approaches that further the professionalization of the DeFi and liquid staking markets, considerations for evaluating protocols, and more.
• For more information and the link to join, follow Liquid Collective on X or LinkedIn.

Upcoming Conferences: To connect with the teams supporting Liquid Collective at an upcoming conference, contact us.

• Permissionless: September 11-13, Austin Texas USA
• IOSG Old Friends Reunion in Singapore - LSD & ZK Modular: September 12, Downtown Core Singapore
• Token 2049: September 13-14, Downtown Core Singapore
• Messari Mainnet: September 20-23, Manhattan New York USA
• Figment Presents: The Digital Asset Side Bar: September 21, Manhattan New York USA
• SmartCon by Chainlink: October 2-3, Barcelona Spain
• StakingRewards Summit: November 10-11, Istanbul Turkey
• Devconnect: November 13-19, Istanbul Turkey

Ecosystem Updates

• LsETH is now tracked on DefiLlama, a DeFi data and TVL aggregator. View the Liquid Collective dashboard.
• Evan Weiss, founder of the Proof of Stake Alliance (POSA) and Chief Business & Policy Officer at Alluvial, a team supporting Liquid Collective’s development, published an op-ed outlining his perspective on why most liquid staking tokens are not securities. Read the post on POSA’s site, or catch up on Weiss’ Tweet thread.
• On August 30th the total supply of ETH staked crossed the 20% mark for the first time, according to Staking Rewards. Check out their milestone post.
• Bitcoin Suisse published "Investment Navigator: Decentralized Finance," an overview of developments in the sector. The report states that “After Shapella, the Liquid Staking sector absolutely dominates in all significant growth metrics,” noting that “Almost all key metrics are positive in the second quarter, total assets staked on Ethereum are up a whopping +36%, and 23.3% across the industry.” Read Bitcoin Suisse’s Navigator here.
• Figment published an overview comparing different types of ETH staking, including protocol staking, pooled staking, and liquid staking. Read Figment’s article.
• Twinstake launched support for institutional Avalanche staking on their platform. Read Twinstake’s announcement.
• Rated upgraded the platform’s Ethereum Network Overview to track execution client diversity, geo and host distribution, and more. View Rated’s Ethereum Network Overview.
• The total assets staked in the liquid staking sector have crossed $19B, according to Token Terminal data. View the key metrics.

• Total Deposited ETH: 19,865.09 ETH +783.09%
• Total Value Locked: $31,345,495 +592.59%
• LsETH Conversion Rate: 1 LsETH = 1.02637 ETH +1.56%
• Total Reported Validator Count: 262 validators +274.28%

All data is accurate as of September 8, 2023. View real-time onchain data here on Dune. Percentage changes are from the last edition of By The Numbers published on April 12, 2023.

Catching up with Mr.X