Lido fundamentals shine whilst the broader crypto market struggles to regain traction


The crypto market has witnessed a turbulent few weeks after the FTX collapse however Lido Finance, a liquid staking protocol, has been a vivid spot amidst the chaos. In keeping with Information from DeFiLlama, Lido protocol has earned $1 million or extra in charges every day since October 26. 

Let’s analyze the on-chain fundamentals to see why this development has continued.

What’s behind Lido Finance’s progress?

Lido’s progress began in Could 2021, pre-FTX collapse. The charges reached an all-time excessive on Nov. 10 as price income practically topped $2.6 million. The protocol earns 10% of the whole Ethereum (ETH) staking rewards generated from person deposits.

Information additionally reveals a gentle enhance in deposits to Ethereum’s PoS consensus interprets to an uptick in Lido’s price seize.

Lido whole deposits. Supply: Dune Analytics

Lido’s price income strikes in tandem with Ethereum Proof-of-stake (PoS) earnings since Lido sends acquired Ether to the staking protocol. After the FTX collapse, Ethereum exercise has grown due to an uptick in decentralized change (DEX) exercise. Ethereum charges and income additionally reached a 30-day peak on Nov. 8, posting $9.1 million in charges and $7.3 million in income.

Ethereum charges and income. Supply: Token Terminal

New and every day energetic customers preserve growing

Distinctive depositors into the Lido protocol have reached 150,000, demonstrating that Lido is constant to draw new customers. The rise in distinctive deposits comes after centralized “earn” applications have proven weaknesses on account of publicity to their publicity to FTX, Genesis, BlockFi and others.

Lido distinctive deposits. Supply: Dune Analytics

Every day energetic customers and Lido (LDO) token holders are additionally growing on Lido. In keeping with knowledge from Token Terminal, every day energetic customers hit a 90-day excessive of 837 on Nov. 17 additional bolstering the platform’s constructive momentum.

Lido tokenholders and every day energetic customers. Supply: Token Terminal

Associated: DeFi platforms see income amid FTX collapse and CEX exodus

Lido’s market capitalization doesn’t match its on-chain fundamentals

Whereas charges, deposits and income proceed to extend for Lido, the market cap of LDO tokens is just not holding tempo.

As talked about above, Lido hit a document quantity of charges on Nov. 10, on the identical time the market cap decreased from $1.2 billion to $663.7 million.

In keeping with Coingecko, throughout this identical interval, the worth of LDO tokens dropped from $1.80 to a low of $0.90.

Lido’s circulating market cap and costs. Supply: Token Terminal

Regardless of the market-wide downturn, Lido is displaying sturdy fundamentals on a number of fronts. The regular uptick in DAUs, income and new distinctive contributors are all key parts for assessing progress and sustainability inside a DeFi platform.