Can Lido turn over successfully?

In the past seven days, the market value of Lido DAO has risen by about 200%, and it has suddenly become the most profitable cryptocurrency among the top 100 digital assets by market value. The main positive is because of the launch of Ethereum 2.0. Recently, Ethereum developers announced that the Merge update is expected to take place on September 19, and the Lido DAO token (LDO) rose by 25% on the day of the announcement. This is because 5.1 million ETH is locked in Lido’s staking contract. In addition to the price increase, the amount of Ethereum staking through the Lido platform has also increased dramatically, mainly because the exact date of the upcoming release is known. Lido is currently the largest provider by total staked value, and a successful Merge launch may bring more users to Lido, which in turn may increase demand for LDO tokens.

Can Lido turn over successfully?

facts that cannot be ignored

It has to be said that even if the price has risen by 200%, compared with the historical high, the current price is only about 40% of the original price, which is not enough to make up for the loss of LDO this year. Since hitting a local high in April, LDO has lost 66% of its value. In early July, LDO fell nearly 90%, making it one of the worst performing tokens among the top 100 cryptocurrencies by market cap.

Can Lido turn over successfully?

Spring of Lido DAO?

According to a study in March this year: Lido is the market leader in Ethereum’s liquid staking, accounting for more than 80% of the market share in the field. Lido co-founder Konstantin Lomashuk told TechCrunch that at today’s prices, more than $10 billion worth of assets is staked on Lido, spread across 76,000 personal crypto wallets. He also said that to understand why assets on Lido are growing by 15,000% in 2021, it is first necessary to understand why some cryptocurrency holders do not choose to stake their tokens.

First, compared to investing in some decentralized finance (DeFi) products, staking is considered less risky and therefore less profitable from a return perspective. What’s more, staked ETH is effectively “locked up” and cannot currently be withdrawn, making high-reward DeFi strategies more attractive to many yield-seekers.

Second, if users want to stake their ETH today, they will either need to stake at least 32 ETH (worth over $93,000 today), mostly relying on centralized exchanges like Coinbase or Binance. It is well known that crypto users, especially early adopters, prefer to use a decentralized network rather than relying on a middleman to execute transactions.

Lido aims to solve both of these problems with its decentralized staking platform, which allows users to stake their tokens without requiring a minimum investment. Users of Lido can use their staked ETH as collateral to participate in DeFi protocols — meaning they no longer have to choose between staking ETH and earning attractive DeFi returns, Lomashuk said. The platform does this by issuing ethereum-native derivative financial products, which Lomashuk likens to a “new type of bond.” The platform also supports liquid staking on the Solana, Kusama and Terra blockchains, and is running on Polygon this year. Staking on each of these chains has its own unique complexities, requiring Lido to write entirely new code every time it joins a new protocol.

Can Lido turn over successfully?

Lido is governed by a Decentralized Autonomous Organization (DAO), a structure that allows the organization to eliminate users’ personal minimum stakes by pooling their assets. Last year, the DAO had 90 voting members, all holders of Lido’s governance token, who collectively acted as Lido’s decision-making entity.

“There are many decisions through a DAO, even small ones like adding a new validator or staking more assets on that validator. Big decisions also need to go through a DAO, for example, redistributing Lido tokens or adding some incentive to the token measures,” Lomashuk said.

Can Lido turn over successfully?

How Lido Works

  • Stake: Lido allows users to stake their assets for daily staking rewards. Users can stake any number of tokens – there are no minimums.
  • Mint: When staking Lido, the minted pledge token is 1:1 linked to the initial stake. Staking tokens can be used throughout the DeFi ecosystem to increase returns.
  • Defi: Lido allows users to use staking assets for additional income. Use tokens (earn daily staking rewards) as collateral for lending, mining, etc.
  • Community: Lido DAO is a community that builds liquid staking services and manages Lido’s development direction. The number of DAO participants is growing every day, with contributors working together to build Lido’s future.

safety

Lido has passed contract audits by several blockchain security companies. After all, for projects involving pledge, security has always been the most concerned issue for everyone.

Can Lido turn over successfully?

Epilogue

As the crypto market begins to pick up, ethereum prices are slowly recovering. This is also good news for Lido DAO. In addition, although the price of stETH has not recovered to the same level as the price of Ethereum, it is also developing in a positive direction. At the same time, the risk of forced liquidation is gradually decreasing, and the selling pressure is decreasing, which shows that the confidence of holders is also increasing. Lido’s staking protocol is also the largest liquidity provider and issuer of stETH, which in turn makes LDO a beneficiary.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/can-lido-turn-over-successfully/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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