Comparison Of Lido And Rocket Pool Staked Deposits

In this article , we aim to compare the deposits to Lido and Rocket Pool by using ethereum_core tables.

First, take a look at all stake deposits by all staking services in this dashboard. Next let’s look at Lido and Rocketpool separately and compare their staked deposits, as well.

By Ethereum Merge , Ethereum makes the transition from proof-of-work (PoW) to proof-of-stake (PoS). The proof-of-work method of consensus on the blockchain relies on the lockup of a staker’s Ethereum. Computing power is required to secure blockchain consensus. This is done by people (miners) who secure the network. The Merge allows for decentralization and security by requiring a minimal number of nodes and reducing the amount of work required to run nodes Compared to PoW, PoS requires 99% less energy Through scalability, it opens the possibility of sharding and 100k TPS in the future.

The Ethereum merge is again postponed to June . We can see that from the below tweet.

Staking Deposits By Top Staking Services

This section allows us to view the staking deposits and amounts staked upon ETH2 by multiple stake providers. By comparing the number of ETH staking deposits by different providers, the LIDO is showing the maximum number of deposits.

Over three quarters of the total deposits (79.74%) came from LIDO stake providers.The amount of deposits has risen in recent months. According to the below graph showing ETH stake deposits by various providers, after LIDO, there are more ETH stake deposits in the Rocket Pool since Jan 1, 2022.

Staking Deposits By LIDO

Before we continue, let’s take a brief moment to introduce the LIDO Stake provider.

What is Lido and what problems does Lido solve?

Ethereum’s transition to proof of stake (PoS) began on December 1st, 2020, with the launch of the Beacon Chain. As a result, holders of Ethereum tokens were able to earn rewards by staking their tokens to protect the Ethereum network. However, staking is not something a typical ETH cryptocurreny holder can do because it requires extensive technical knowledge to make it work. Here are some issues associated with staking ETH tokens.

1. Technical expertise: It is important for a person to have the ability to install and update software all the time so as to stay current with the latest release of the stake module. The failure to run the software due to power outages or other issues results in a loss of rewards and in the worst case, staked Ethereum.

2. No unstaking: Due to the fact that Ethereum 2.0 has not yet been launched and no deadline has been set, once ETH tokens have been staked they cannot be withdrawn until Ethereum 2.0 is launched. Because there is no deadline for Ethereum 2.0 network launch, no one knows when they will be able to withdraw their funds. Probably by the end of 2023, maybe even earlier. All depends on how quickly Ethereum core developers complete the transition from Proof of Work to Proof of Stake.   

3. ETH Token requirements: In order to serve as a validator and stake tokens, one must have ETH tokens worth 32 ETH. At today’s ETH price it is more than 100,000 USD investment one must make to start earning staking rewards. 

Lido tackles all these problems head on and solves them elegantly. With LIDO, anyone can stake ETH tokens even if they only have a fraction of them. Lido’s liquid staking solution for Ethereum is backed by the biggest providers.

How Lido Works?

In essence, Lido is an Ethereum smart contract that allows ETH holders with less than 32 ETH to pool their funds and earn rewards. Pooled funds are distributed among selected operators of Ethereum validators that are required for staking operations.

Lido also solves the liquidity problem of ETH stakers by issuing a special ERC20 token, stETH, at a 1:1 ratio when users deposit their ETH for staking. StETH tokens can be traded, transferred, and used in major Defi protocols, just like ETH. If a user wishes to unstake their ETH, they can sell stETH on Curve for ETH and use it however pleases them.

Here from the below graph we can see the number of ETH staking deposits by LIDO stake providers since Jan 1, 2022 . There were 58.83K staked deposits by LIDO between January 1, 2022 and April 25, 2022. The highest LIDO staked deposit of 6.16K was observed on March 15, 2022. Deposits were on the rise during this period.

This heat map shows the number of staked deposits for LIDO on each day of the week and on a weekly basis since January 1, 2022 . LIDO staked a greater number of deposits during Week11 2022 (March 13-19,2022). 

Staking Deposits By RocketPool

The Rocketpool is ranked second among all staking providers based on amount staked and by number of deposits on Ethereum 2.  In this section, we analyze Rocketpool’s staking deposits and staked amounts on ETH since January 1,2022. First, let’s discuss about Rocketpool briefly.

What is RocketPool?

Rocket Pool is an Ethereum 2.0 staking pool that enables users to stake their cryptocurrency. In addition to empowering the decentralization of the Ethereum ecosystem and increasing the security of it, the protocol aims to reduce both the capital and hardware requirements for staking on ETH 2.0. Towards this end, Rocket Pool facilitates trustless stake on an Ethereum node by letting users choose their node operator anonymously.

From the below graph we can find out how many Ethereum deposits have been made by Rocketpool since January 1st 2022. In the beginning of 2022, no deposits were staked by the Rocket Pool at all. Later from February 2022 onwards, we can observe an increasing number of deposits staked by this pool. After March 9, 2022, the number of deposits by Rocket pool will increase significantly, and we should see further increases in deposits. All of this is because of the nearest period of achievement for the Merge on the Ethereum network. Stake deposits via Rocketpool have not increased much during April. 

This heat map shows the number of staked deposits for RocketPool on each day of the week and on a weekly basis since January 1, 2022 . RocketPool staked a greater number of deposits during Week10 2022 (March 6-12,2022). All of us thought the release of the Ethereum Merge was very close in February and March. Through this also, we can see a large number of staked deposits made during the month of February and March. Recently, we received an announcement that the Merge release has been delayed. The reason for the decreasing trend of Staking deposits may also be due to this reason. As you can see, Rocket Pool has not seen much growth recently.

LIDO Vs Rockepool

This section allows us to compare two of the top staking services available on Ethereum network and we will get an idea of which one is better. On this page we can compare the staked number of deposits that LIDO and Rocket pool have made since January 1, 2002.

We can see from the following graph that the staking deposits by LIDO are very high on March 15,2022. The positive effect is that we could be considering more Ethereum deposits, as well as the amount of Ethereum staked by LIDO is constantly increasing from March 2022 onward. It is not surprising that the merge period has moved so closely on Ethereum network, and that we are seeing a more number of deposits being increased dramatically. But, in the early days of April 2022, we have not seen much of an increase of staking deposits on either LIDo or Rocket Pool. We might be seeing this because of the announcement of delay to the Ethereum Merge. Again, we observe an increasing trend of deposits at LIDO, but not at RocketPool.

Lido has a higher percentage of stake deposits than Rocket Pool as shown in the graph below.  The staking of deposits by LIDO is almost 11 times higher than the amount of deposits made by RocketPool. According to most of the stakers, LIDO is attracting the most stakers among all other staking providers as well 

Conclusion

  • According to the analysis above, it can be seen that the number of stake deposits for Ethereum, is trending upwards. In particular, we can see that the maximum number of staking deposits of Eth has seen on March 15, 2022. All of this change can be attributed to the recent Ethereum announcements. It has been announced that a new version of Ethereum will be released soon, adding to what was already an announcement that Kiln is nearing completion, making it more probable than ever before that Ethereum can “merge.” Suddenly, we can observe that staking deposits have been decreasing due to the announcement of the Ethereum team to delay the release of the Ethereum Merge to June 2022. 
  • In regards to the LIDO staking service, the staked number of deposits are very high when compared with other staking service providers. Because holders of Ethereum tokens were able to earn rewards for protecting the Ethereum network by staking their tokens. Staking is, however, not something most ETH holders can do since it requires a great deal of technical expertise. These expertise features made it very popular.
  • From the above analysis ,the LIDO staking service providers represents 79.74% of the staked deposits out of all Ethereum staked deposits.
  • RocketPool staking service provider had the second highest number of Ethereum deposits after LIDO staking providers.
  • Based on a comparison of the stake deposits on LIDO and RocketPool, LIDO stakes deposits approximately 11 times more than RocketPool. As a result, LIDO is attracting a high number of stakers in comparison to all other staking providers.
  • According to my analysis above, there have been a number of deposits of Ethereum and also the staked amount of Ethereum has increased from March 2022 onwards.  Announcing that Ethereum’s Merge is imminent and completing Kiln, Ethereum is now closer than ever before to the “merge.”  Suddenly, we can observe that staking deposits have been decreasing due to the announcement of the Ethereum team to delay the release of the Ethereum Merge to June 2022. 

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