Upcoming Shapella upgrade fuels liquid staking growth — AMA with Swell
The liquid staking sector, with $16.68 billion in TVL, now surpasses DeFi lending and bridges as the second-largest crypto sector according to Defillama data. The upcoming Ethereum Shapella upgrade, scheduled for April 12, has fueled existing interest: Liquid staking tokens, along with Ether (ETH) itself, see an increase in value as the upgrade date approaches.
The Shapella upgrade technically combines two major modifications: Shanghai, which brings changes to the execution layer, and Capella to the consensus layer. Among other improvements, both updates will allow ETH holders to retrieve their staked ETH and stake additional amounts of ETH without being tied to an indefinite lockup period, as is the case currently.
As one of the consequences, experts expect mass adoption of staking and that Ethereum will remain the largest proof-of-stake network in terms of staked capitalization, although a possible ETH price increase is debatable.
Liquid staking provides crypto users with a wide range of flexibility. It allows them to stake tokens on a blockchain network in order to earn rewards while at the same time maintaining the liquidity of their staked assets. By using liquid staking, token holders can participate in various DeFi activities — lending, borrowing or providing liquidity — without having to unlock or unstake their tokens, as they receive a “receipt” token (liquid staking tokens or LSTs) that represents their staked assets. This provides greater adaptability and maximizes both staking and DeFi activities.
In addition to asset mobility and yield farming, liquid staking provides fast access to funds, inter-chain security, and stability of the underlying network, as it increases the amount of staked capital, which is
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