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1inch Investment Fund Just Sold Ethereum, What Do They Know?

1inch Investment Fund, a fund closely tied with the crypto exchange aggregating platform, 1inch, has sold 4,685 stETH for 8.54 million USDC at $1,823, according to Scopescan, an analytics platform, on October 24. By selling at spot rates, the fund has netted $1.28 million in profits since the stETH was bought at an average price of $1,550 less than a week ago.

1inch Investment Fund sells Ethereum| Source: Scopescan on X

1inch Investment Fund Sells stETH

StETH, or staked Ethereum (ETH), is an ERC-20 token representing staked ETH on the Lido Finance protocol. The platform allows anyone to stake their coins and earn rewards without necessarily locking their coins for an extended period. 

As of October 24, Lido Finance is the most popular decentralized finance (DeFi) application looking at total value locked (TVL). DeFiLlama data shows that the protocol manages over $15.7 billion of assets, of which over 95% are ETH. 

Lido Finance TVL| Source: DeFiLlama

Technically, any ETH holder wishing to stake and earn network rewards stake on Lido Finance receives stETH in return, representing the stake amount. The higher the staked amount, the more stETH the protocol issued. This stETH can be traded, transferred, or used to secure loans while concurrently earning network rewards. 

Selling stETH means 1inch Investment Fund automatically unstaked the same amount on Lido Finance and sold the underlying coins. Even so, transferring the underlying ETH can take several days when there might be changes to spot prices.

Curiously, the decision is when the crypto market seems to recover, and Ethereum is roaring back to life towards the $2,000 level. Considering that the fund is private and doesn’t divulge its strategy to the public, it couldn’t be immediately determined why it sells stETH when market confidence is high. 

Will Ethereum Prices Break $2,000?

Looking at price charts, Ethereum prices are up roughly 17% from H2 2023 lows, rallying at spot rates. The October 23 and 24 expansion has seen the coin break higher, registering new October highs. Even so, despite the overall confidence, the failure of bulls to complete reverse losses of August 17 should be a concern.

Ethereum price on October 24| Source: ETHUSDT on Binance, TradingView

Ideally, a comprehensive surge above $1,800 and $2,000 could anchor a leg up toward $2,100 in the coming sessions. When the fund sold stETH at $1,823, price data showed it exited at around today’s peak. There is an inverted hammer in the ETHUSDT daily chart, an indicator that prices are inching lower on increasing selling pressure.

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Lido Finance Fees Exploding, Should Comparatively Low Revenue Be A Concern?

The total amount of Ethereum (ETH) staked on Lido Finance, one of the many liquidity staking protocols available, has risen steadily over the past few years. Surprisingly, revenue accrued by the platform (compared to staking rewards distributed) remains comparatively low. 

Lido Finance Revenue Isn’t Growing As Fast As Expected

Looking at Token Terminal data shared on October 19, the blockchain analytic platform observed that while staking rewards paid, counted as “fees” by Lido Finance grew from less than $10 million in early 2021 to over $60 million in June 2023, revenue has grown at a much slower pace. To illustrate, Lido Finance’s average revenue is roughly less than $5 million during this period.

Lido Finance fees versus revenue| Source: Token Terminal

Overall, Lido Finance is a liquidity staking protocol that supports the staking of multiple proof-of-stake (PoS) coins like Ethereum (ETH) without necessarily locking them up. Users can concurrently earn staking rewards while accessing their hard-earned ETH–or any other coin supported.

LDO price on October 19| Source: LDOUSDT on Binance, TradingView

The protocol issues another derivative, stETH, for every ETH staked to achieve this. This token can be freely traded on exchanges. It can even be used as collateral for users keen on taking trustless loans on supported platforms.

Ethereum recently shifted to be a proof-of-stake blockchain to be greener and conserve the environment. This transition was a boon for protocols that supported the first smart contract platform to confirm transactions and remain secure, especially after the activation of Shanghai in April 2023. 

The Shanghai upgrade allowed Ethereum validators to withdraw their staked ETH for the first time, permitting them to use alternatives, of which Lido Finance, looking at total value locked (TVL), was preferred. As of October 19, Lido Finance had a TVL of $13.913 billion, most of it being assets on Ethereum. 

Lido Finance TVL| Source: DeFiLlama

Ethereum Centralization Concerns: How Will This Be Addressed?

Lido Finance makes staking more accessible to everyone while concurrently enhancing liquidity. However, the revenue generated appears low versus the amount of staking rewards distributed to stakers, most of whom are from Ethereum. Part of the revenue the network generates is also distributed to LDO holders and node operators. Whether the liquidity staking protocol plans to increase the 10% fee charged to increase revenue earned remains to be seen.

Presently, there are concerns that Lido Finance’s role on Ethereum could lead to centralization. Ethereum has been accused of being “centralized,” mainly in how it is built. Critics assert that the reliance on its co-founder, Vitalik Buterin, for endorsement and guidance could slow down development in the future.

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Justin Sun Unstakes 20,000 Ethereum (ETH) From Lido Finance, What’s Going On?

A crypto wallet associated with Justin Sun, the co-founder of Tron, a smart contract platform, has moved 20,000 Ethereum (ETH) worth roughly $32.4 million from Lido Finance, a liquidity staking platform. Funds were transferred to Binance, the world’s largest crypto exchange, trading volume and client count.

Justin Sun's ETH transfer from Lido Finance| Source: The Data Nerd on X

The transaction, executed in a single batch, was captured by The Data Nerd, an analysis platform, and shared on X on October 5. As it is, Ethereum (ETH) is under pressure, looking at the performance in the daily chart. 

Ethereum Drops 4%, Are Bears Flowing Back?

Trackers show that the coin is down roughly 4% in three days, confirming sellers of October 2. Notably, the daily chart has a double bar formation with the bear candlestick of October 2, completely reversing buyers of October 1.

This arrangement suggests that bears could be in control, especially considering the draw-down of the past few trading days and the level of participation on October 2 when the coin slipped. 

Ethereum price on October 5| Source: ETHUSDT on Binance, TradingView

In technical analysis, losses at the back of increasing volumes often point to high participation. If prices are rising, then the coin in question could rally. Conversely, a sell-off could worsen if the bar had high trading volumes.

It is also unclear whether Justin Sun plans to sell ETH after transferring coins to exchanges. Crypto transfers to centralized exchanges, which support many stablecoins like USDT and others, are often associated with sell-offs. 

Market participants may interpret such movements as bearish, fueling the sell-off, subsequently heaping more pressure on prices. ETH is now at a one-week low.

Justin Sun Shuffling ETH In 2023

The Data Nerd observes that prices fell the last time the wallet moved ETH to Huobi, which has since rebranded to HTX. In August, the wallet moved 5,000 ETH to HTX. The deposit came a week before ETH prices crashed 12%. 

ETH transfer to HTX| Source: The Data Nerd on X

Bitcoin and Ethereum prices fell sharply in mid-August, causing a “cascade liquidation” that spooked investors. ETH bulls have since failed to reverse those losses. Considering the relatively low trading volumes in the last two months, prices are still boxed within the August 17 trade range, a bearish signal.

In late February 2023, Justin Sun staked 150,000 ETH, worth roughly $240 million, to Lido Finance. The transfer remains the largest single-stay transaction, forcing the liquidity staking provider to activate the Staking Rate Limit feature, capping the amount of coins one can stake at 150,000 ETH. 

Lido Finance said the feature is more of a “safety valve” that “addresses possible side-effects such as rewards dilution, without needing to pause stake deposits explicitly.” 

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Lido (LDO) Price Inks Gains Alongside TVL Rise – What Traders Should Expect

Lido DAO (LDO), the driving force behind the revolutionary liquid staking protocol for Ethereum (ETH), has displayed an impressive 7.41% ascent in its Total Value Locked (TVL) over the course of the last seven days. 

This robust surge in TVL has positioned Lido Finance as a prominent contender in the decentralized finance (DeFi) landscape, illustrating its resilience amidst a fluctuating market.

According to the latest data from DeFiLlama, Lido Finance’s TVL witnessed a notable augmentation, securing its place as the most substantial growth among the top five DeFi protocols. This feat underlines Lido’s exceptional capacity to adapt and expand, distinguishing itself from its counterparts during a pivotal time for the DeFi sector.

Despite the tumultuous price fluctuations that have characterized the altcoin realm, Lido’s TVL growth stood unwavering. This achievement can be attributed to a discernible surge in Ethereum deposits within the protocol over the reviewed timeframe.

Lido’s ETH Deposits Surge Amidst Uncertainty

The primary driver behind Lido’s remarkable TVL surge over the past week was a substantial influx of ETH deposits into the platform. Even in the face of significant market price gyrations, Ethereum holders exhibited a commendable degree of confidence in Lido’s liquid staking protocol. 

Recent technical analysis highlights that the platform saw a cumulative total of 185,500 ETH deposits in the last seven days alone. This not only positioned Lido as a beacon of stability in a tempestuous market but also secured its status as the go-to protocol for net new Ethereum deposits.

Insights And Outlook For Lido Finance

Lido Finance’s recent achievements underscore its growing prominence in the DeFi realm. With a current price of $1.66 according to CoinGecko, the platform’s token’s resilience (LDO) is further affirmed by its 24-hour rally of 5.1%. Over the span of the last seven days, Lido has achieved gains of 1.4%, a testament to its unwavering performance even in challenging times.

As the broader cryptocurrency landscape continues to evolve, Lido’s success serves as a reminder of the power of innovative DeFi solutions. By facilitating liquid staking for Ethereum, Lido DAO not only appeals to those seeking rewards from staking but also embodies the ethos of adaptability that is vital for thriving in the ever-changing world of decentralized finance.

As Lido outperforms its peers in TVL growth and garners a significant influx of ETH deposits, it proves that adaptability and reliability are the cornerstones of sustainable success in the dynamic realm of decentralized finance.

(This site’s content should not be construed as investment advice. Investing involves risk. When you invest, your capital is subject to risk).

Featured image from PortalCripto

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Lido (LDO) Bulls Lock Horns For Rally This Week Ahead Of V2 Update

May 15th marks a new dawn for the Ethereum liquid staking protocol, Lido Finance, as it seeks to launch the highly anticipated V2 update on its platform.

According to Lido contributors, the V2 update is its biggest platform update yet and a step in the right direction toward further decentralization in the blockchain industry.

The update aims to enhance the user staking experience on  Lido Finance protocol by introducing two new features which achieve this purpose.

Related Reading: PEPE Outperforms Bitcoin In Social Media Buzz, Triggers Bullish Run For Frog Coin

LDO, the official native token of the Lido finance protocol and liquid staking platform, is seen to soar in price in today’s trading session as bulls gear up in response to the incoming update.

What Is The Lido Finance Protocol V2 Update

Earlier in February 2023, an official Lido Finance announcement release introduced a V2 update proposal that brings unique enhancement features to its Ethereum liquid staking platform.

Fast forward to May, the team scheduled a final on-chain voting process for its V2 update proposal to take place from the 12th-15th following the success of the Ethereum Shapella upgrade in April.

According to a tweet from Lido’s official handle, if the vote on the proposal passes and is successful, the V2 update will go live on May 15th, which is today, and support direct in-protocol stETH: ETH withdrawals and staking router architecture.

So far, the V2 update proposal has been approved as it got the required approval and support rating needed for the update.

The V2 update on the biggest liquid staking platform brings two new core platform features, including a Staking Router and a Withdrawal feature.

The Staking Router feature on the V2 update promotes a diverse and decentralized ecosystem of validators by allowing the admission of new node operators. Using a new modular architectural design and framework, the V2 Staking Router enables anyone to develop on-ramps for node operators ranging from Distributed Validator Technology (DVT), solo stakers, and Distributed Autonomous Organizations (DAOs).

The second feature on the update, withdrawals, will be a game changer for Lido Finance as it enables stakers on the platform who hold stETH to have access to withdrawals at a 1:1 ratio.

LDO Daily Chart Analysis

Data reports from Coinmarketcap see the native token of the biggest liquid staking platform, LDO, trading at $2.12, a 9.58% increase in the last 24 hours. LDO market capitalization has also increased by 9.43% at the time of writing. LDO opened with a bullish candle on the daily timeframe and is among the top three gainers in the cryptocurrency markets today.

Related Reading: Dogecoin Sees Highest Transactions Count Ever Due DRC20 Madness

LDO trades at the strong resistance area at $2.12, with bulls looking to break that level for more upside movements. However, if bulls fail to break that critical area, the asset could experience a retracement in price and trade lower.

This resistance line and 50 EMA at $2.13 are major hurdles the asset must break to experience a rally.

 

Lido

 

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Why Are Liquid Staking Cryptocurrencies Seeing Double-Digit Gains?

Over the last week, liquid staking cryptocurrencies have been seeing a significant upside. All of these tokens have successfully moved into the green territory, recording double-digit gains for their holders. Although these digital assets seem to be following the general crypto market uptrend, there is another factor pushing up their prices.

Why Are Liquid Staking Crypto On The Rise?

Liquid staking cryptocurrencies have been receiving more attention ever since the announcement that the Ethereum “Shanghai” upgrade is likely to take place in March 2023. This upgrade is important for the network because it will mean that staked ETH will finally be withdrawable.

Anticipation around this upgrade is already on the rise and liquid staking tokens are enjoying a good portion of this attention. Their popularity comes from the fact that they allow stakers to earn a yield on staked ETH even though they can’t withdraw their ETH. It also makes it possible for stakers to have tokens on hand which they can deploy on other protocols to further participate in the ecosystem.

Liquid staking protocols reward stakers with ETH-pegged tokens such as stETH and ankrETH and make it possible for ETH users to stake without having to become validators themselves. But instead of having to rely on centralized exchanges to do this, as was previously the case, these DeFi protocols are decentralized.

Ethereum price chart from TradingView.com

The higher earning potential of staking with liquid staking protocols has led to more demand for them. With the Shanghai upgrade coming, it is expected that more ETH will be moved to these protocols, leading to more demand for their native cryptocurrencies.

The Largest Liquid Staking Protocols

The largest liquid staking protocol in the space now is currently Lido Finance. It accounts for around 30% of the total 15 million staked ETH, making it an important contender in the space. Its native LDO token has a market cap of $1.6 billion and its price is up 57% in the last 7 days.

Liquid staking crypto

Next in line is Frax Share whose price is up 21% in the last week. The digital asset’s market cap is almost $403 million, rewarding users with frxETH for their staked ETH at an 8% APR. This is the highest APR of any liquid staking protocol. 

Rocket Pool takes third place with a market cap above $260 million and is up 18% in the 7-day period. But in terms of ETH deposited, it is one of the highest, accounting for around 6.5% of the total market share.

Others include Ankr Protocol which is up 26% in 7 days, as well as Stafi, pStake Finance, and StakeWise, all of which are up 32%, 20%, and 10%, respectively, in the same time period. 

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Lido DAO Surges By More Than 57% in Just A Week – More Gains Up Ahead?

Lido DAO (LDO), the native cryptocurrency of Lido Finance, significantly increased its total market capitalization which now stands at $1.25 billion.

This no longer comes as a surprise as the crypto asset is in the midst of an incredible run that enabled it to post double-digit gains on its intraday, weekly, bi-weekly and monthly charts.

At press time, according to data from Coingecko, LDO is changing hands at $1.51, increasing its value by 13% during the last 24 hours.

Over the previous seven days, the digital token went up by 56.5% while also posting a bi-weekly gain of 60% and monthly increase of 50%.

Already in the middle of an impressive showing, some analysts believe that Lido DAO still has room for improvement, thanks to a new upcoming ETH upgrade.

Lido Expected To Benefit From ETH Shanghai Upgrade

According to a recently released analysis, Lido Finance, at the time of this writing, is responsible for nearly 30% of all staked ETH tokens, making it the largest liquid staking platform for Ethereum right now.

It has been noted that the demand for the platform increased dramatically after Ethereum switched from proof-of-work to proof-of-stake mechanism back in 2022.

Moreover, the analysis stated that the blockchain’s upcoming Shanghai fork will enable users to withdraw their staked ETH tokens which, in turn, is expected to encourage more people to stake through Lido Finance. This will then increase the demand for the project’s native token.

Some experts believe that these are just some of the triggers that helped the crypto asset go up by more than 55% in just seven days and will also play a vital role in the altcoin’s attempt to sustain its bullish run.

… But LDO Could Lose Its Momentum

Although things are looking good right now, there’s still a chance that LDO could enter a price correction phase that will not only halt its upward movement but will also make it lose most, if not all of its current gains.

LDO is currently in an overbought territory and has reached a point for psychological take-profit zone which are indications of an impending intense selling pressure.

There is also a noticeable drop in the number of LDO tokens being held by its top addresses, indicative of whales selling their holdings. This is expected, given the massive surge that Lido DAO has made over the last few days which presents an opportunity for investors to take profit.

If these conditions don’t change, there’s a high possibility that the crypto asset’s incredible run will come to an abrupt end and it will return into its previous bearish track.

-Featured image: Coinpedia