Lido Finance, a leading player in the Liquid Staking Derivatives sector, has demonstrated its commitment to staking by staking its entire ETH treasury holdings. This move comes as interest in staking ETH has grown following the Shanghai Upgrade. Lido Finance executed proposal 161, staking 20,300 ETH into stETH. This action solidifies Lido Finance’s treasury, with 20.7% in stETH ($63M) and 75.7% in LDO ($231M). Let’s delve into the implications of this decision and the recent rise in LDO’s price.
Lido Finance’s Treasury Adjustment:
By staking its ETH reserves, Lido Finance now holds $304.7M (including LDO) and $72.5M (excluding LDO). This positions them as the 13th largest holder, with a balance of 33k stETH. While this move contributes to a potentially more sustainable treasury for Lido DAO and increases the Total Value Locked (TVL) of the protocol, its direct impact on the token’s price remains uncertain.
Enhancing Sentiment and Protocol Activity:
Lido Finance’s recent action could boost sentiment surrounding stETH. Santiment’s data shows a significant improvement in weighted sentiment, indicating a positive perception within the social sphere. On the protocol side, Lido experienced a 20.3% increase in active users over the past week, while revenue generated by the protocol rose by 7.5%.
LDO Price Rise and Bullish Momentum:
LDO, the native token of Lido Finance, has garnered investor interest in recent weeks. After testing the support level of $1.62 in January, LDO’s price surged by 35.23%, reaching $2.208 on June 3rd. The price exhibited multiple high highs and high lows, establishing a bullish trend.
Future Outlook for LDO:
If LDO maintains its current momentum and retests the weakened resistance level of $2.506, the chances of surpassing this resistance will increase. The Relative Strength Index (RSI) and Chaikin Money Flow (CMF) indicators were at 66.5 and 0.11, respectively, suggesting that money flow and momentum favored the bulls at the time of writing.
Lido Finance’s decision to stake its entire ETH reserves reinforces its commitment to staking and potentially enhances the sentiment surrounding stETH. The protocol continues to experience increased activity and revenue, while the price of LDO has risen on the back of bullish momentum. As Lido Finance forges ahead with its staking conviction, the market will be watching closely to see the impact on the protocol, the token’s price, and the overall growth of the Liquid Staking Derivatives sector.
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