Lido has suffered multiple months of outflows as liquid restaking protocols grow.<\/p>\n
Lido, the leading Ethereum liquid staking protocol, wants to foster new restaking architecture built around its stETH token.<\/p>\n
On May 13, Steakhouse Financial, a web3 financial advisory firm, published a\u00a0proposal<\/a>\u00a0advocating for establishing the Lido Alliance to endorse \u201cEthereum-aligned\u201d projects through an \u201cumbrella framework for endorsement and partnership.\u201d <\/p>\n The alliance would focus\u00a0on restaking by promoting the development of infrastructure built around Lido’s liquid staking token (LST), stETH. Steakhouse outlined three types of protocols that the\u00a0alliance\u00a0seeks to promote, including new projects providing permissionless restaking architecture, building permissionless restaking tokens (LRTs), or developing actively delegated services (AVSs).<\/p>\n \u201cLido Alliance is a framework\u2026 for Lido DAO to identify and recognize projects that share the same values and\u00a0mission,\u00a0and have a way\u00a0to positively contribute to the stETH ecosystem,\u201d the proposal said. \u201cGrowing an Ethereum-aligned ecosystem around stETH helps decentralize the network.\u201d<\/p>\n If passed, Lido would establish an Alliance workgroup tasked with assessing prospective members, assisting existing members, and offboarding members deemed to be violating the\u00a0alliance\u2019s\u00a0principles of Ethereum or stETH alignment.\u00a0<\/p>\n The\u00a0Alliance\u2019s\u00a0operations and membership would be governed by LDO tokenholders.<\/p>\n The proposal comes as Lido faces stiff competition from liquid restaking token (LRT) protocols and EigenLayer for market share over staked Ethereum.<\/p>\n Restaking allows users to earn additional yields on top of Ethereum staking rewards by delegating staked assets to validate third-party AVSs deployed on EigenLayer,\u00a0which\u00a0is\u00a0currently positioned\u00a0as Ethereum\u2019s sole\u00a0major\u00a0restaking protocol.<\/p>\n The growing popularity of restaking has recently come at the expense of Lido\u2019s market share, with users pulling\u00a0$1.4 billion<\/a>\u00a0worth of Ether from Lido in 30 days as of April 24.\u00a0For comparison,\u00a0the LRT protocols EtherFi and Renzo\u00a0enjoyed respective inflows of $1.2 billion and $429 million over the same period.<\/p>\n The trend of LRT protocols eating Lido\u2019s lunch has continued to persist since, with EtherFi and Renzo boasting inflows of $396.4 million and $324.5 million over the past 30 days as $151.7 million worth of Ether exited Lido.<\/p>\n StETH currently accounts for 28.7% of the supply of staked ETH, down from a high of\u00a032.5%<\/a>\u00a0in September. As such, Lido ranks as the\u00a0largest\u00a0DeFi protocol with a total value locked (TVL) of $27.4 billion, followed by EigenLayer with nearly $14.5 billion, according to DeFi Llama.<\/p>\nLido suffers outflows as LRTs\u00a0rise<\/h2>\n