1. ETH use in DeFi has decreased due to an increase in staking. Staking involves holding ETH in a wallet to support the network and earn rewards, rather than using it for DeFi applications.
2. However, the rapid growth of LSDfi (Liquidity Staking DeFi) could be a catalyst for a bull market. LSDfi allows users to earn rewards by staking their liquidity provider tokens (LPTs) in a pool, which can then be used for trading.
3. The growth of LSDfi is driven by its ability to provide higher yields than traditional staking, as well as its potential for capital gains through the appreciation of LPTs.
The shift towards staking has led to a decrease in ETH use in DeFi, but the growth of LSDfi could provide a boost to the market. By offering higher yields and potential capital gains, LSDfi is attracting users looking for alternative ways to earn rewards. As the DeFi ecosystem continues to evolve, it will be interesting to see how these trends develop and impact the overall market.