Lido witnesses surge in staked deposits: Will LDO’s growth be sustainable?

• Lido witnessed surge in staked deposits, TVL grew as nicely.
• Destructive lengthy/brief distinction steered potential promoting stress as costs rose.

During the last week, the Lido [LDO] protocol witnessed a surge within the variety of staked deposits on its platform. In accordance with a tweet on 24 January, the variety of staked deposits on Lido elevated, besides that of Solana [SOL].

🖥️ Lido on L2

Following a wave of integrations and continued LDO incentives, wstETH continued its progress on L2:

– @arbitrum: 22,856 wstETH (7d: +2.01%)
– @optimismFND: 14,945 wstETH (7d: +3.03%) pic.twitter.com/1h10vbW0lN

— Lido (@LidoFinance) January 23, 2023

Thus, extra customers had been selecting to stake their holdings by the Lido platform at press time, indicating that the protocol nonetheless had potential for progress.

Together with the surge in staked deposits, there was additionally progress noticed in Layer 2 options. Particularly, Wrapped stETH [wstETH] elevated by 2.01% during the last week on Arbitrum and by 3.03% on Optimism [OP].

This steered that extra customers had been turning to Layer 2 options to stake their belongings and Lido was benefiting from this development.

All of those components impacted Lido’s TVL, which grew by 7.77% within the final week.

Nonetheless, regardless of the rising TVL, the variety of distinctive customers on Lido declined. Prior to now month, the general variety of distinctive customers on the Lido protocol fell by 7.31%. This implied that whereas extra customers are staking their belongings on Lido, fewer had been actively utilizing the protocol and fascinating with its companies.

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Regardless that the variety of distinctive customers on the protocol declined, the income generated by Lido elevated by 6.31% during the last week, in keeping with Messari. Thus, Lido was nonetheless producing earnings and will showcase progress on this space.

LDO faces stress

These components have contributed to the expansion of the LDO token’s costs. Nonetheless, the rising costs of the LDO token additionally impacted its MVRV, which grew alongside the LDO’s value. A excessive MVRV indicated that LDO holders would revenue in the event that they ended up promoting their positions.

Moreover, the lengthy/brief distinction was additionally unfavourable, suggesting that almost all addresses holding LDO had been short-term holders. These short-term holders may find yourself promoting their positions for a revenue and impression LDO’s costs negatively.

It stays to be seen how lengthy Lido can retain its dominance and progress. On the time of writing, the worth of LDO was $1.01 after rising by 0.71% within the final 24 hours, in keeping with CoinMarketCap.

This text initially appeared right here.

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