Lido DAO Price Rises as Ethereum Merge Strength

Lido DAO Price Rises as Ethereum Merge Strength

The upcoming Ethereum Merger (ETH) is one of the most talked about developments in the cryptocurrency ecosystem, as the second largest cryptocurrency in the world through market capitalization is the hard-working-proof transition (Proof of Work – PoW) to Proof of Promise (Proof of Bet – PoS).

One of the protocols that is crucial to Merge’s success is Lido DAO (LDO), a liquid stacking platform that allows users to leverage the value of their assets for use in decentralized finance and get a promised return.

Data from Cointelegraph Markets Pro and TradingView show that since LDO hit a low of $ 0.42 on June 30, its price has risen 107.6% to the daily high of $ 0.874 on July 9, but at the moment since the writing this, the altcoin has fallen behind. to 0.65 GIP.

4 hour chart of LDO / USDT. Source: Trade View

This is explained by three reasons for the reversal of the LDO situation: the success of the Merger on the Sepolia test network, the continued increase in platform ether deposits and the slow rise in the price of the ETH in question (stETH) compared to the price at Ether. . on the market.

Seplia testnet merge

The transition to proofs was a difficult process, but came closer to completion on July 6 with the successful merger of PoW and PoS chains on testol Sepolia Ethereum.

NEWS — Seplia has performed another successful Merger test on Seplia. Goerli then. Now after. Do not sleep.—bankless.eth (@BanklessHQ) July 6, 2022.

As a result of this development, only one Merge test remains to be done on the Goerli testnet, and if this one goes without major problems, then the Ethereum mainnet is the next one.

With Lido specializing in the provision of liquid stacking services for Ethereum, every step towards a complete transition to PoS benefits the liquid stacking platform, as ether holders looking for a less complex way to bet their signals can him to use Lido services and not worry about locking signals.

Ether deposits continue to rise

Evidence that interest in the Lido continued to rise can be found in data provided by Dune Analytics which shows an increase in the amount of Ether deposited on the protocol.

Ether was placed on the Lido. Source: Dune Analytics

As the graph above shows, as of July 7, 4.128 million Ether has been pledged to the Lido.

Ether stacking statistics. Source: Lido DAO

Read also: Ethereum merge testnet: overall success – “The merger will not be delayed by minor events»

STETH begins to recover

Another factor that helped boost the value of LDO is the rally in the price of stETH, which has lost its peg to Ether in recent months as troubled funds have sold their stETH in an attempt to avoid insolvency.

According to data from Dune Analytics, the price of stETH is now trading at around 97.2% of the price of Ether, from a low of 93.6% on June 18th.

1 hour chart price ETH: stETH. Source: Dune Analytics

While StETH has not achieved full price parity with Ether, its move in the right direction, combined with less selling pressure from forced liquidations, appears to have helped restore some investors’ confidence in the market.

This, in turn, benefited LDO as the protocol is the largest supplier and issuer of Liquid Ether Stacking.

The views and opinions expressed herein are those of the author only and do not necessarily reflect the views of Any investment and business transaction involves risk. You should do your own research before making a decision.

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