In the Ethereum ecosystem, the popularity of liquid staking continues to grow. As of March this year, the total locked assets in the LSDfi market have reached $85 billion. However, behind these impressive numbers, concerns are also mounting.

Although Lido remains the leader, its market share has dropped from 32% to 28%, indicating a move towards decentralization. More notably, re-staking protocols like EigenLayer have surpassed $20 billion in TVL, increasing the risk concentration and raising growing concerns within the industry about systemic risks. Additionally, the average leverage ratio of LSTfi protocols has reached 3.5x, which is quite alarming.

Regulators are also not idle. The US SEC recently issued a statement explicitly requiring liquid staking service providers to disclose risk information.

However, there are ways to break the deadlock. Stader Labs has launched a $100 million insurance fund for coverage; Stakewise V3 has increased yields from 4.2% to 5.8% using a dynamic interest rate model. The balance between innovation and risk control may be found in these new solutions.