Lido Finance, the liquid staking protocol for the Ethereum (ETH) network, has seen significant price drops over the past two weeks, largely influenced by the market’s downtrend and lack of upside momentum.. However, a notable breakthrough could be in the works for the protocol’s native token, LDO, despite negative financial metrics.
Lido and Mellow Finance Partnership
Despite challenging market conditions, Lido has made notable advancements in its ecosystem. Collaborating with Mellow Finance as part of the Lido Alliance, the protocol introduced Advanced decentralized finance (DeFi) strategies for stETH holders.
These strategies aim to leverage Mellow Finance’s permissionless Liquid Restaking Token (LRT) creation, allowing stETH holders maximize asset utility through decentralized re-establishment and accumulation of various rewards.
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The newly launched vaults also target secure and flexible means of engaging with Ethereum and DeFi staking, increasing the liquidity and utility of stETH.
This partnership marks the initial phase of the Lido Alliance’s efforts to expand Ethereum. staking ecosystem through strategic collaborations with aligned projects. However, key metrics indicate a decline in the price of LDO, potentially following in the footsteps of Ethereum, which also saw a drop to $3,480 from its March peak of $3,990.
Negative Financial Metrics
Lido’s total locked value (TVL) decreased by 1.70%, totaling US$35.39 billion, mainly influenced by ETH price drop.
The amount of ETH staked witnessed a slight increase of 0.26%, with a net increase of 19,392 ETH staked last week. Similarly, the amount of (w)stETH in lending pools saw a moderate increase of 1.46%, reaching 2.66 million stETH, while the amount of w(stETH) in liquidity pools decreased by 3.13% for 89.3 thousand stETH.
Additionally, the 7-day trading volume for (w)stETH stood at $1.03 billion, down 19.7% compared to the previous week. Additionally, the total amount of wstETH interconnected to Layer 2 solutions decreased by 2.86% to 136,893 wstETH.
Analyzing the bridge statisticsThe distribution of wstETH among various Layer 2 networks is as follows:
- Arbitrage: 69,676 wstETH (-6.07%)
- Optimism: 28,906 wstETH (+0.44%)
- Base: 15,429 wstETH (-6.35%)
- Rollover: 10,329 wstETH (+9.48%)
- Polygon: 8,522 wstETH (+0.07%)
- Line: 2,928 wstETH (+20.59%)
- zkSync: 1,093 wstETH (-0.49%)
LDO price targets ranging from $6 to $17
Despite these metrics, crypto analyst Alex Clay remains optimistic about LDO’s future. Clay recently shared bullish predictions for LDO, predicting significant breakouts if bullish momentum resumes.
In a recent publish On social media site X, Clay emphasized LDO’s 756 days of upward accumulation, suggesting a potential “massive breakout.” The analyst further described interesting price targets for optimistic investors, ranging from US$6.3 to US$17.2.
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LDO is trading at $1.88, representing a 3.5% drop in the 24-hour period and a drop of over 20% in the last two weeks. Notably, the token witnessed a 74% decrease from its all time high from US$7.30 in June 2021.
It remains to be seen whether positive developments in the Lido protocol and increased staking activity can help mitigate losses. Furthermore, the potential price recovery of Ethereum could impact the trajectory of LDO, potentially leading to a new uptrend aimed at recovering previously lost levels.
Featured image of DALL-E, chart from TradingView.com