Lido Finance, the liquid staking protocol for the Ethereum (ETH) network, has experienced significant price declines over the past two weeks, largely influenced by a downtrend in the market and a lack of bullish momentum. However, despite the negative financial metrics, there could be a significant breakthrough for the protocol’s native token, LDO.
Lido and Mellow Finance partnership
Despite hard market conditions, Lido has made significant progress in its ecosystem. The protocol cooperates with Mellow Finance as part of the Lido Alliance introduced advanced decentralized finance (DeFi) strategies for stETH holders.
These strategies aim to leverage the permissionless creation of Liquid Restaking Token (LRT) by Mellow Finance, enabling stETH holders maximize asset utility through decentralized replenishment and accumulation of various rewards.
The newly launched vaults also aim to provide a secure and elastic means to work with Ethereum and DeFi staking, increasing the liquidity and utility of sETH.
This partnership represents the initial phase of the Lido Alliance’s efforts to expand Ethereum pond ecosystem through strategic collaboration on tailored projects. However, key indicators point to a decline in the LDO price, potentially following in the footsteps of Ethereum, which also saw a decline to $3,480 from its March high of $3,990.
Negative financial indicators
Lido’s Total Value Locked (TVL) declined 1.70% to $35.39 billion, primarily driven by ETH price drop.
The amount of ETH staked saw a delicate raise of 0.26%, with a net raise of 19,392 ETH staked over the past week. Similarly, the amount of (w)stETH in credit pools increased moderately by 1.46%, reaching 2.66 million sETH, while the amount of w(stETH) in liquidity pools decreased by 3.13% to 89.3 thousand. sETH.
Moreover, the 7-day trading volume for (w)stETH was $1.03 billion, down 19.7% from the previous week. Additionally, the total amount of wstETH bridged to Layer 2 solutions decreased by 2.86% to 136,893 wstETH.
Analyzing bridging statisticsthe distribution of wstETH between different Layer 2 networks is as follows:
- Arbitrage: 69,676 wstETH (-6.07%)
- Optimism: 28,906 wstETH (+0.44%)
- Base: 15,429 wstETH (-6.35%)
- Scroll: 10,329 wstETH (+9.48%)
- Polygon: 8522 wstETH (+0.07%)
- Linea: 2928 wstETH (+20.59%)
- zkSync: 1093 wstETH (-0.49%)
LDO price targets range from $6 to $17
Despite these indicators, cryptocurrency analyst Alex Clay remains sanguine about the future of LDO. Clay recently shared a bullish outlook for LDO, predicting a significant breakout if bullish momentum returns.
In recent post on the social media site X, Clay highlighted 756 days of increasing LDO accumulation, suggesting a potentially “massive outbreak.” The analyst further outlined electrifying price targets for bullish investors ranging from $6.3 to $17.2.
LDO is trading at $1.88, down 3.5% in 24 hours and down over 20% over the past two weeks. It is worth noting that the token saw a 74% decline compared to its peers highest ever of $7.30 in June 2021.
Time will tell whether positive changes to the Lido protocol and increased staking activity can aid mitigate losses. Additionally, a potential rebound in Ethereum prices could impact the LDO trajectory, potentially leading to a up-to-date uptrend to regain previously lost levels.
Featured image from DALL-E, chart from TradingView.com
