Lido’s Ethereum Staking Dominance Slips to 24.4% – Is Competition Fueling a Healthier ETH Ecosystem?
Lido’s share of Ethereum staking has dropped to a record low of 24.4%, down from 32.3% in 2023, as institutional players like Figment and exchange-backed services gain ground. While Lido loses market share, the broader ecosystem wins
A Shifting Landscape: Lido No Longer the King of Staking
For years, Lido reigned as the undisputed leader in Ethereum liquid staking—its LDO token and stETH derivative becoming staples in DeFi portfolios. But the tides are turning.
As of August 2025, Lido’s dominance has eroded to just 24.4% of all staked ETH, a significant drop from its 32.3% share in 2023. This isn’t a sign of failure, but of maturation. The Ethereum staking ecosystem is finally diversifying, reducing the risk of centralization and opening the door for institutional-grade players to step in.
Why the Drop? Decentralization in Action
Ethereum developers have long warned that if any single staking provider controls more than one-third of the network’s stake, it could threaten consensus security. The community responded not with regulation, but with competition.
Projects like Rocket Pool ($RPL) have championed decentralization by enabling smaller validators and node operators to participate without 32 ETH minimums. Darren Langley, Rocket Pool’s General Manager, noted: “There was a big community effort to ensure that Lido did not reach 1/3 of total stake.” That goal has been achieved—not by force, but by choice.
Meanwhile, Figment, a leader in institutional staking infrastructure, has emerged as a major beneficiary of this rebalancing. With a focus on asset managers, hedge funds, and custodians, Figment has seen ETH deposits double since the SEC clarified in May that staking does not constitute a securities offering.
That regulatory green light—extended to liquid staking participants just last week—has removed a major roadblock for traditional finance players eyeing crypto yields.
Institutional Floodgates Opening
The momentum is building fast. BlackRock recently filed for an Ethereum staking ETF, a move that could allow retail and institutional investors to earn staking rewards directly through regulated vehicles. If approved, it would mark a seismic shift in crypto adoption—one that benefits the entire staking ecosystem, not just Lido.
While Lido may have lost share, it still stands to gain. Increased institutional demand for staked ETH—whether through stETH, rETH, or new ETF wrappers—will boost liquidity, deepen markets, and drive renewed interest in LDO.
As Lorien Gabel, CEO of Figment, put it: “Now that the largest institutions in the world are embracing digital assets, we’re busier than ever onboarding them.”
A Healthier, More Resilient Network
Lido’s declining market share isn’t a red flag—it’s a success story. Ethereum’s staking layer is becoming:
- More decentralized, reducing single points of failure
- More competitive, driving innovation in yield, security, and UX
- More institutional, with regulated pathways now open
This diversification strengthens the network’s long-term resilience. No longer reliant on a single dominant player, Ethereum’s consensus is now backed by a mosaic of validators, from community-run nodes to global asset managers.
What’s Next for Lido and LDO?
Lido isn’t fading—it’s adapting. With plans to expand into Bitcoin staking, Solana, and Polygon, the protocol is evolving into a multi-chain liquid staking hub. And if BlackRock’s ETF launches, LDO could see renewed speculative and utility-driven demand.
But the era of monopoly is over. The new narrative isn’t about dominance—it’s about decentralized strength.
