Lido Performing Relatively Better than Rest of the Crypto Market

Following the FTX collapse, the cryptocurrency market has experienced some turmoil, but Lido Finance, a liquid staking technology, has stood out among the mayhem. Since October 26, Lido protocol has generated at least $1 million in fees every day, according to data from DeFiLlama.

To determine why this tendency has persisted, let’s examine the on-chain fundamentals.

Before the FTX collapse, in May 2021, Lido began to expand. On Nov. 10, the fees reached a record high as fee income almost surpassed $2.6 million. 10% of all Ethereum staking rewards from user deposits go to the protocol.

Data also demonstrates that a rise in Lido’s fee capture corresponds to a consistent increase in deposits to Ethereum’s PoS consensus.

Due to the fact that Lido transmits received Ether to the staking protocol, its fee income moves in lockstep with Ethereum Proof-of-stake (PoS) revenues. Decentralized exchange (DEX) activity has increased since the FTX collapse, which has boosted Ethereum activity. On November 8, Ethereum recorded $9.1 million in fees and $7.3 million in income, both of which represented a 30-day high.

The Lido protocol now has 150,000 unique depositors, showing that Lido is still drawing in new users. Following the weakness of centralized “earn” programmes caused by their exposure to FTX, Genesis, BlockFi, and other companies, there has been an increase in unique deposits.

On Lido, the number of daily active users and Lido (LDO) token holders is also rising. Token Terminal data indicates that on November 17, the number of daily active users reached a 90-day high of 837, further enhancing the platform’s upward trend.

The market valuation of LDO tokens is not keeping up with Lido’s rising fees, deposits, and earnings.

As was already noted, on November 10 Lido reached a record number of fees at the same time that its market cap dropped from $1.2 billion to $663.7 million.

At the time of writing, the cost of LDO tokens fell from $1.80 to as low as $0.90.

Despite the general market decline, Lido is displaying excellent fundamentals on a number of levels. A DeFi platform’s growth and sustainability may be evaluated using several key metrics, including the consistent growth of DAUs, revenue, and new unique members.