<\/p>\n
Rocket Pool\u2019s rETH is dominating trading volume among liquid staking tokens, with arbitrageurs and DeFi degens converging on the token.<\/p>\n
Data from IntoTheBlock<\/a> shows rETH accounting for more than half of the liquid staking sector\u2019s volume over the past three weeks. The token drove $28.8M worth of trades over the past 21 days, overshadowing stETH\u2019s $6.7M despite Lido\u2019s total value locked (TVL) outpacing that of Rocket Pool by eight times.<\/p>\n The data also shows increasing activity surrounding Frax\u2019s FRXETH and SFRXETH tokens, while the dominance of Coinbase\u2019s cbETH token has declined significantly from its mid-year highs.<\/p>\n <\/p>\n <\/a><\/p>\n Speaking to The Defiant, Lucas Outumuro, head of research at IntoTheBlock, attributed the surge in rETH activity to the launch of Prisma Finance\u2019s LST-backed stablecoin, mkUSD, alongside adoption incentives in the form of its native PRISMA token.<\/p>\n \u201cWe looked into it on-chain, and it appears that the spike in rETH volumes the past few weeks is linked to the launch of PRISMA,\u201d said Lucas Outumuro. \u201cThey increased the supply caps on Nov. 2 and launched their token as incentives for people to mint mkUSD through the protocol.<\/p>\n “This appears to have increased demand for rETH, with deposits into Prisma spiking that day.\u201d<\/p>\n Outumouro added that the jump in rETH demand from Prisma users drove up the token\u2019s price, opening up arbitrage strategies for opportunistic traders.<\/p>\n \u201cThere was a lot of volume since rETH was bought on the market, driving its price to a premium relative to its ETH holdings, and then more volume to arbitrage the price back down,\u201d he said.<\/p>\n The rETH token last traded hands for $2,147, while ETH is trading for $1,964, according to CoinGecko.<\/p>\n The surge in rETH adoption will come as welcome news to Lido skeptics<\/a>, with many analysts warning that stETH\u2019s sizable dominance could threaten the decentralization of Ethereum\u2019s staking layer.<\/p>\n Start for free<\/a><\/div>\n Analysts have warned against a single staking entity amassing control of more than one-third<\/a> of staked Ether\u2019s supply, with Lido attracting criticism for refusing to self-limit its stake despite crossing above 32% earlier this year. Lido\u2019s staked Ether dominance now sits at 31.5%<\/a>, according to Dune Analytics.<\/p>\n However, an increasing number of DeFi protocols are actively seeking to drive up the adoption of minority LSTs while placing limits on the volume of stETH deposits they support.<\/p>\n EigenLayer, the pioneering Ethereum restaking protocol, recently launched a \u201cgovernance contest<\/a>\u201d allowing holders of various LST tokens to vote for which liquid staking derivatives they would like the protocol onboard next.<\/p>\n\n