Türkçe
Español
Once considered among the most promising and popular altcoins, LDO Coin is now facing uncertain signals. Even though its merger with Merge boosted its appeal, it’s not garnering the attention anticipated these days. However, the prediction was as the altcoin king grows, so would demand for LDO Coin. As Ethereum continues to grow, what’s happening with LDO Coin? Here are the details.
Lido DAO (LDO)
Lido seems to be falling behind in the liquid staking world. New players replacing the protocol could cause further weakening. However, its current position is not all that bad. Despite recent negative signals, LDO continues to maintain its lead in the expanding liquid staking environment.
According to Glassnode’s data, the supply of Lido Staked ETH (stETH) was roughly 16 times more than its nearest competitor, RocketPool’s rETH.
For now, Lido DAO continues to sit in the leadership chair in its field. However, new players are growing, and their growth rates are exciting.
LDO Coin Commentary
The supply of rETH, the second largest liquid stake token in the market, is growing quite rapidly compared to stETH. While Lido’s liquid staking derivative has increased by 54% since the beginning of the year, rETH’s has grown nearly three times more, at 157%. Additionally, further data from Glassnode revealed that the increased demand for stETH did not translate into an increase in new token holders. Since Lido’s implementation of unlocked withdrawals in mid-May, growth in new addresses has remained stable.
Other protocols’ LSTs, such as RocketPool and FRAX, witnessed a notable increase in new users after the Shanghai Upgrade. These findings suggest that most new deposit transactions by LDO came from existing stETH holders. This cohort was likely testing the withdrawal process in the early stage, and after being satisfied with the process, they continued to repurchase ETH.
This situation can be explained by analyzing the trajectory of stETH token holder balances. After withdrawals were enabled on Lido, there was a sharp decline in stETH assets, indicating users were using their LSTs for ETH. However, once things settled, the average token balance rose to 51.
As a category, liquid staking protocols expanded their dominance after Shapella, outperforming other staking options such as centralized exchanges (CEX) and staking pools. Data from Dune highlighted that the contribution of liquid staking institutions to ETH staking increased from 31% to 37% since Shapella. Conversely, the amount of ETH staked through CEXs decreased from 34% to 20% during the same period.
The decline in centralized exchanges could come from investors acting cautiously to mitigate risk. Long-term investors lock their ETH assets under the assumption that decentralized platforms are less risky. On the other hand, if LDO’s growth continues to lag behind its competitors, it could negatively impact future expectations.
