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- Lido ranks above on Aave, but challenges lie ahead.
- The decline in APR, user base, whale interest and network growth raises concerns for Lido.
owned by Lido [LDO] Wrapped Country ETH [wstETH] topped the charts at press time, as per Ethereum [ETH] market on Aave [AAVE]. WstETH Lido is a type of ERC-20 token that represents a stake in an Ethereum 2.0 deposit contract, enabling users to take part in the Ethereum 2.0 network and earn rewards for staking their tokens.
The Ethereum market is active @AaveAave V3 hits $55.9m with wstETH tops $22.9m (40.98%).https://t.co/MCJxxHGdvf pic.twitter.com/HonIONxdnc
— Lido (@LidoFinance) January 31, 2023
Read Lido [LDO] Price Predictions 2023-2024
Interest in the protocol is growing
There is a growing interest in staking ETH through Lido, and this is reflected in the growth of Total Value Locked (TVL) on the platform. According to Defi Llama data, TVL Lido increased from $7.86 billion to $8.07 billion over the last seven days.
However, TVL Lido’s growth may stall due to a decline in APR (Annual Percentage Rate), which is supported by Dune Analytics charts.
LDO holders beware
Over the last week, the number of unique users on the Lido protocol fell by 3.42%, prompting users to look for alternatives. This decrease in user base could impact the revenue generated by Lido in the future. At the time of writing, Lido generated 8.42 million in revenue over the past week, according to Messari.
This could be one of the reasons why whale interest in LDO tokens has decreased over the past month, despite rising prices. If a large number of whales start selling their holdings, it could negatively affect LDO prices.
Network growth, which is an indicator of the number of times LDOs are transferred for the first time between new addresses, also declined during this period. As such, the new address is not interested in the LDO at press time.
Meanwhile, the speed of LDO tokens, or the frequency of LDO exchanges between addresses, has also decreased, indicating that the activity of addresses holding LDO tokens has also decreased.
Realistic or not, this is the LDO marketcap in BTC terms
In conclusion, even though wstETH Lido topped the charts on Aave, it is important to consider the declining APR, the decreasing number of unique users, and the lack of interest of whales in the token. These factors may affect the performance of the protocol in the near future.
It remains to be seen if LDO can turn things around and continue to grow in the Ethereum market.
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