The upcoming Shapella upgrade for Ethereum has triggered a surge in the price of ETH and the tokens powering liquid staking platforms. According to CoinGecko data, the price of Ethereum has increased by 4.7% overnight, outpacing Bitcoin’s 1.3% increase during the same period. This is attributed to the approaching Shapella upgrade, which is set to take place on April 12. The upgrade will allow for ETH withdrawals from the staking contract, thereby lowering the risk of holding staked Ethereum, also known as liquid staking derivatives (LSDs) via platforms like Lido Finance.

The emergence of liquid staking platforms has allowed Ethereum holders to stake their ETH and earn a liquid staking token in return, which can be used in the world of DeFi to earn additional yield. As such, governance tokens linked to various liquid staking platforms have also enjoyed significant price increases. The governance tokens of the top liquid staking platforms, including Lido DAO (LDO), Rocket Pool (RPL), and Frax Shares (FXS), have experienced double-digit percentage gains in the last 24 hours.

LSD tokens have outperformed Ethereum in terms of percentage gains, at least twice that of ETH in 2023. The top LSD tokens have recorded up to 150% compared to Ethereum’s near 65% gains year-to-date. Currently, decentralized liquid staking platforms account for 33.3% of the total staked ETH, with Lido DAO leading the space with a 93.79% share.

ETH (blue), FXS (yellow), LDO (orange), RPL (blue) price comparison. Source: TradingView.

The Shapella upgrade is considered the most significant Ethereum upgrade since the network’s merge event last September, when the protocol transitioned from a proof-of-work (PoW) consensus mechanism to a proof-of-stake (PoS) mechanism. With the imminent Shapella upgrade, the Ethereum network is expected to continue experiencing significant growth, and it is likely that the popularity of LSD tokens and liquid staking platforms will persist.