Ethereum News Today: Lido's Ethereum staking share dips to 25% as stETH depegging and Aave rates drive exit pressures

Generated by AI AgentCoin World
Thursday, Jul 24, 2025 9:50 am ET1min read
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Aime RobotAime Summary

- Lido's Ethereum staking share fell to a 3-year low of 25% by July 24, with staked ETH volume dropping 5% over six months.

- StETH's depegging from ETH worsened due to high WETH borrow rates on Aave, triggering leveraged position unwinds and ETH sell pressure.

- Exit pressures surged with 235,000 stETH in redemption queue, driven by withdrawals from Justin Sun, Abraxas, and Ether.fi.

- Despite outflows, Lido remains top staking provider with 9M ETH, offering 2.8% APR and $33B TVL amid market volatility.

- Analysts warn sustained depegging risks confidence, urging peg restoration and competitive rewards to maintain ecosystem dominance.

Lido’s dominance in the

Ethereum
staking market has declined to a three-year low, with its share dropping to 25% as of July 24, according to data from Entropy Advisors. The platform’s staked ETH volume has fallen by 5% over the past six months, marking the lowest level since March 2022 [1]. This decline coincides with a prolonged depegging of stETH, Lido’s liquid staking token, from ETH. The depegging has been exacerbated by rising WETH borrow rates on
Aave
, which have rendered leveraged staking strategies unprofitable, prompting users to unwind positions and increase sell pressure on ETH [2].

The withdrawal queue for Lido has surged to its highest level since the platform enabled exit functionality, with over 235,000 stETH awaiting redemption. This exit pressure has been driven by large withdrawals from entities such as Justin Sun, Abraxas Capital, and Ether.fi. Despite these outflows, Lido remains the largest Ethereum staking provider, holding over nine million ETH—far ahead of competitors like Binance and

Coinbase
. The platform still offers a 2.8% annual percentage rate (APR) and reports $33 billion in total value locked [3].

Blockchain analytics firm Glassnode attributes the stETH depeg to inefficiencies in arbitrage strategies, compounded by a growing validator exit queue. Mark Zeller, co-founder of Aavechan, highlighted that large ETH movements from whale accounts, particularly Justin Sun, spiked Aave’s utilization rates, driving up borrowing costs and accelerating the unwinding of leveraged positions. While borrowing rates have since normalized, Zeller anticipates a return to peg stability [4].

The depegging has raised concerns about the broader liquid staking market, as stETH’s value directly impacts Lido’s ability to retain users. Analysts note that the platform’s resilience, despite its declining share, underscores its entrenched position in the Ethereum ecosystem. However, sustained depegging could erode confidence, particularly if withdrawal pressures persist. Lido’s ability to navigate this crisis will depend on restoring peg efficiency and maintaining competitive staking rewards amid a volatile market.

Sources:

[1] Entropy Advisors, Dune Analytics

[2] Glassnode

[3] Lido’s official website

[4] Aavechan (Mark Zeller)

Note: URLs for sources [1]-[4] were not provided in the original content.