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Liquid Staking Tokens Rally as Kraken Shuts Staking Service to Settle With SEC
The sudden price uptick of governance tokens for the largest liquid staking protocols – Lido Finance, Rocket Pool and Frax Finance – was a counterweight to the decline of the broader crypto market.
Updated Feb 10, 2023, 5:10 p.m. Published Feb 9, 2023, 9:22 p.m.
Governance tokens of the largest liquid staking protocols surged on news that U.S.-based crypto exchange Kraken had settled with the U.S. Securities and Exchange Commission (SEC) on Thursday to sunset its crypto staking service.
The LDO governance token of Lido Finance, the largest liquid staking protocol with some $8.4 billion of staked ether on the platform, jumped 10.4% in an hour, according to data by CoinGecko. Competitor Rocket Pool’s RPL jumped 7.3%. Smaller liquid staking platform’s tokens such as Persistence’s pSTAKE and StaFi’s FIS gained 6.7 and 11.4%, respectively.
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Prices have more recently pared some of their earlier gains.
The rally served as a counterweight to Thursday's downturn in the broader crypto market. The CoinDesk Market Index (CMI), that tracks the price of a basket of cryptocurrencies, decreased 2.2% in an hour. Bitcoin (BTC) and ether (ETH) are both in the red in the past 24 hours, with much of their declines occurring in the last three hours.
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Staking is the consensus mechanism to validate transactions for proof-of-stake blockchains, including Ethereum, which also offers a way for investors to earn yield on their digital asset holdings. However, the SEC has been vocal about its concerns that staking services are the equivalent of unregistered securities according to present regulations.
The settlement between Kraken and the SEC might be a boon for decentralized rivals to grab market share from centralized service providers. Some of the largest centralized exchanges, such as Binance, Coinbase and Kraken, let users stake cryptocurrencies and earn yield as a service on their platforms and have been popular staking providers. Staking on centralized exchanges takes up about 28% of all staked ether, data by Dune Analytics shows.
Read more: Ether Liquid Staking Tokens Jump on Rumors of SEC Ban for Staking Providers
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Exchange Review - March 2025
CoinDesk Data's monthly Exchange Review captures the key developments within the cryptocurrency exchange market. The report includes analyses that relate to exchange volumes, crypto derivatives trading, market segmentation by fees, fiat trading, and more.
What to know:
Trading activity softened in March as market uncertainty grew amid escalating tariff tensions between the U.S. and global trading partners. Centralized exchanges recorded their lowest combined trading volume since October, declining 6.24% to $6.79tn. This marked the third consecutive monthly decline across both market segments, with spot trading volume falling 14.1% to $1.98tn and derivatives trading slipping 2.56% to $4.81tn.
- Trading Volumes Decline for Third Consecutive Month: Combined spot and derivatives trading volume on centralized exchanges fell by 6.24% to $6.79tn in March 2025, reaching the lowest level since October. Both spot and derivatives markets recorded their third consecutive monthly decline, falling 14.1% and 2.56% to $1.98tn and $4.81tn respectively.
- Institutional Crypto Trading Volume on CME Falls 23.5%: In March, total derivatives trading volume on the CME exchange fell by 23.5% to $175bn, the lowest monthly volume since October 2024. CME's market share among derivatives exchanges dropped from 4.63% to 3.64%, suggesting declining institutional interest amid current macroeconomic conditions.
- Bybit Spot Market Share Slides in March: Spot trading volume on Bybit fell by 52.1% to $81.1bn in March, coinciding with decreased trading activity following the hack of the exchange's cold wallets in February. Bybit's spot market share dropped from 7.35% to 4.10%, its lowest since July 2023.
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- Ethena's USDe becomes fifth stablecoin to surpass $10 billion market cap in just 609 days, while Tether's dominance continues to slip.
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