DeFi Staking Servies Could Benefit From U.S Crackdown On Staking
The recent crackdown by U.S. federal agencies on centralized crypto entities has given a significant boost to decentralized finance. DeFi staking protocols stand to benefit from the various enforcement actions by multiple federal agencies last night, including the New York DFS’s probe into Paxos and the SEC’s controversial settlement with Kraken.
News of centralized crypto exchange Kraken shutting down its staking services in the U.S. sent governance tokens of popular DeFi staking protocols soaring. Data from CoinGecko shows that the total market capitalization of the top liquid staking governance tokens went up by 8.5% over the last 24 hours.
Rocket Pool’s native token RPL led this DeFi staking rally, gaining a whopping 25% following the SEC’s crackdown on Kraken’s taking service. LDO, the governance token of the largest liquid staking protocol Lido Finance, surged more than 10%. Frax Share’s FXS token followed the trend, gaining more than 6%.
Coinbase CEO Brian Armstrong was among the first ones to reveal a potential crackdown on centralized staking services in the U.S. Lido Finance is expected to benefit the most if Coinbase were to be subjected to an enforcement action like Kraken for its staking service.
DeFi staking protocols are believed to capture the market share that would be vacated by a further crackdown. Popular cryptocurrencies with proof-of-stake consensus mechanisms saw a steep decline in their price following the SEC’s announcement. Ethereum (ETH) has lost more than 5% of its value over the past 24 hours. Cardano (ADA) followed suit, tanking 6% over the same period.