Liquid Staking ETH Platforms Analysis

In this dashboard, we'll see what liquid staking is, what platforms are utilizing this and why. As a bonus we'll also see how it would affect the ETH 2.0Merge

A Breakdown Before a Breakdown

We all know that ETH network so far has operated by PoW (Proof of Work) consensus mechanism. Now there's word around the Block(chain) that ETH is going to switch to PoS (Proof of Stake) consensus mechanism. This is a big deal for ETH and the Ethereum community. This will be introduced in the upcoming ETH 2.0 (ETH Merge) upgrade.

Here's what you need to know about ETH 2.0, PoS and Liquid ETH staking:

This will end the era of ETH mining, and the miners will be replaced by validators. Validators are the ones who will be responsible for the security of the ETH network by storing data and verifying transactions and adding blocks to the chain. They will be rewarded with ETH for their services.
The Beacon Chain is the first phase of the ETH 2.0 upgrade. It will be a PoS chain that will be used to manage the validators and their rewards. It will also be used to manage the ETH 2.0 sharding process.
The The Merge is the second phase of the ETH 2.0 upgrade. It will be the transition from the current PoW chain to the PoS chain. This will be the point where the ETH network will be fully decentralized and the miners will be replaced by validators.
The Sharding is the third phase of the ETH 2.0 upgrade. It will be the process of splitting the ETH network into multiple shards. This will allow the network to scale and process more transactions per second. And it will also reduce the transaction fees.

Liquid ETH Staking

Liquid ETH staking is a new way to stake ETH. It will allow you to stake your ETH without having to lock it up in a validator contract. You will be able to stake your ETH and earn rewards without having to worry about the ETH 2.0 upgrade. You will be able to stake your ETH and earn rewards until the ETH 2.0 upgrade is complete.

Liquid Staking Platforms

We'll analyze the aggregate results from following platforms:

Stakewise (Any Amount)
Stkr (Min 0.5 ETH)
Cream
Rocket Pool (Min 0.01 ETH)
Lido (Any Amount)
Direct Staking (32 ETH)
1. Solo Staking
2. Staking as a Service
3. Pooled Staking: This option includes the liquid staking
4. Centralized Exchanges

Why Analyze Liquid Staking of ETH?

Some say that liquid staking derivatives pose risks to ETH 2.0 by making Ethereum vulnerable to Abuse of Power and centralization. To this end we’ll take this topic under our analysis magnifiers.

As seen from the general stats, we can see that over 11.16M ETH has been staked over all platform so far. This amount is close to 10% of total supply.
Over 150,000 users have engaged in at least one transaction!
And from the Maximum and Average numbers we can see that there are some big whales directly invested.

Staking Volume Over time

We see concentrated weeks of heavy liquidity staking and not a clear trend. It might indicate that the this activity could be tangled with news regarding ETH upgrade. Many times ETH has postponed its upgrade after announcing a possible date.
One certain thing is the rise of reluctancy to stake after the LUNA crash.
Direct Staking which has fixed amount of 32 ETH has apparently been the constant and most reliable way to stake.
Up until crash in May, Lido was the most popular platform for staking over the past year and the volume dramatically changed after May.
Rocketpool is another successful platform that has been attracting more volume recently.

Depositors & Their Fav Platforms

There has been more than 150,000 depositors,; Direct Staking & Lido has been their favorite platforms. These two account for 94% of depositors.
Interestingly, Rocketpool started to attract stakers after the crash in May and recently saw a spike in new depositors.
The reason for the recent spike in Rocketpool’s new users, is their rETH incentivization program.
Lido has also been conducting its own incentivization program.
The reason for such programs is the importance of liquidity in trading safely.
Other factors that possibly attract new users to Rocketpool, Lido and Stakewise could be as follows:
1. Low Minimum amount threshold for getting started
2. Active Bug Bounty programs that helps the network’s safety.
3. And Diversity of their clients
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Users Behavior on Platform Usage

Only about 3% of users have staked in more than 2 platforms. The reasons could be as follows:
- As we saw before Direct Staking required 32 ETH for pooled staking. This is a very large amount for a single user and since many have preferred direct staking, usually one wouldn’t try to stake again in another platform after such large investment.
- A few of the platforms have incentivizing programs that is profitable for those with large portfolios to invest in multiple such programs.

Dollar Cost Averaging(DCA) Users & Bots!

In order to find out if users are dollar cost averaging, we'll look at the distribution of the number of times users have deposited. We'll also look at the distribution of the total amount of ETH deposited.

A huge chunk of users, 85%, are one time stakers, which again could be linked to the 32ETH initial investment.
About 14% of users have deposited up to 10 times, maybe to dollar cost average or another reason.
However the rest 1% percent of the addresses have been probably using long or short term DCA Bots.
Finally See the number of users who have deposited 40-100 ETH, are less than users who have deposited 100+ ETH; This could possibly be a strong indication of Dollar Cost Averaging since usually in this scenario next deposit is larger and most of the times twice the previous buy.

General Stats Comparison of Platforms

It is worth noting here that some stats for the Cream finance could be affected by the exploit in on Oct 27.
Lido has proven to be a worthy competitor for Direct Staking since it has also attracted Whales that have caused the average of deposited ETH to this platform to be above that of Direct Staking despite its high entry price of 32 ETH.
There’s a noticeable ETH deposit of 62,000 ETH to Lido liquidity staking pools which confirms the presence of whales on this platform.
From the overall stats we saw how close the Median the average ETH depositing volumes are and are close to 32, which also confirms the prevalent use of Direct Staking from the breakdown of platform stats above.

Useful Resources

During the research on the question, we found the following resources useful:

Notes

Following staking function Signatures were missing from Flipside DB for Stakewise:
- stakeWithPartner(address) Bytes4(0x0395501f)
- stakeWithPartnerOnBehalf(address,address) Bytes4(0x9a548a44)
- stakeWithReferrer(address) Bytes4(0x461a9523)
Cream has 2 staking Contracts and old one which has been exploited and is deprecated and a new one ending in "9FdB64"

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