TechFlow reported, according to the latest report from HashKey Capital, the Ethereum LSD market is poised for explosive growth, with TVL potentially increasing by $24 billion over the next two years.
The report stated that this year, the Ethereum LSD market's TVL exceeded $22 billion, with the total market capitalization of all LSD projects reaching $18 billion. It is projected that by the end of Q2 2025, staked Ether could account for 31%-45% of Ethereum's total supply.
"Since LSD protocols' revenue is directly tied to ETH price, liquid staking protocols can be viewed as leveraged bets on ETH, as they gain significantly stronger market share compared to staked ETH itself. A substantial portion of staking comes from both solo and centralized exchange (CEX) staking."
HashKey Capital predicts that as investor participation increases, staking yields may decline, but noted that this impact could be mitigated due to the composability of decentralized finance (DeFi) protocols.
