Ethereum: increase the staking crypto on Lido

Very positive crypto news for the blockchain industry: the market capitalization of Lido’s staked Ether has increased to $10.3 billion, with the cryptocurrency posting significant gains over the past week and Ethereum’s price up 11.9%.

This recent increase has pushed the token’s overall market valuation to the eighth position, according to Coingecko data.

Some data regarding the crypto market: staking of Ethereum on Lido grows

As anticipated, the value of liquid staking tokens associated with Ethereum (ETH) increased significantly over the past week after Ether’s 11.9% gains against the US dollar.

Notably, Lido’s staked Ethereum token, STETH, now has a market capitalization above the $10 billion range, reaching $10.36 billion on Monday 20 March 2023.

According to Coingecko’s statistics, STETH’s market valuation now ranks eighth, with Dogecoin‘s (DOGE) market capitalization ranking tenth. Above STETH is the market valuation of Polygon (MATIC) at $10.42 billion.

Currently, there is a circulating supply of about 5.8 million STETH and in the last 24 hours the token has registered global exchanges of $22.35 million. The most active exchanges dealing with STETH are Bybit, Gate.io, and Huobi.

STETH has gained 12.4% this week and 4.6% in the past 30 days. Currently, the Lido Finance website estimates that STETH stakers are receiving an annual percentage rate (APR) of about 5.9% by staking the token.

DefiLlama’s statistics

At the moment, Lido is the largest decentralized finance (DeFi) protocol of the $49.01 billion total value locked (TVL) on Monday. Lido’s TVL accounts for 21.59% of the entire amount of value locked in DeFi.

In the past seven days, DefiLlama’s statistics show that the Lido’s TVL has increased by 8.9% and in 30 days it has increased by 17.07%. DefiLlama explains that as of Monday, 7.83 million ETH worth $13.98 billion are staked in liquid staking protocols.

Lido’s STETH accounts for 74.51% of the aggregate. Coinbase’s Wrapped Ether token protocol has a total blocked value of $2.1 billion, or 1.16 million Ethereum. It is the second largest liquid staking project in terms of TVL.

While STETH is shown on Coingecko as the eighth largest coin by market capitalization, this is not the case for other cryptocurrency market aggregation websites such as CoinMarketCap.

Since it is a synthetic version of Ether, some cryptocurrency market aggregation sites do not include STETH in the top ten, despite its capitalization.

Lido and the $30 million in Ethereum: selling or staking?

The Decentralized Autonomous Organization behind Lido, Ethereum’s largest staking pool, is considering whether to sell or stake the $30 million in Ether (ETH) from its treasury.

A proposal was submitted on 14 February by DAO’s financial unit, Steakhouse Financial: four possible choices, one of which contemplates staking some or all of its ETH on Lido in the form of Lido Staked ETH (stETH).

Another choice would see LidoDAO selling some or all of its 20,304 ETH in exchange for stablecoins. Thanks to the Shanghai and Capella upgrades, both scheduled for the first half of the year, users will soon be able to withdraw their staked ETH.

Although the conversion of ETH to Staked ETH could lead to higher profits in the long run, Steakhouse Financial is concerned that locking too much of the funds within the smart contract could cause the risk of not having enough ETH on hand when needed.

Steakhouse Financial stated that it may be necessary to exchange Ether for a stablecoin to ensure greater liquidity should operating expenses increase.

Steakhouse Financial also revealed that LidoDAO currently boasts an inflow of about 1,000 stETH per month. In other words, DAO earns between $1.3 million and $1.5 million per month, with the price of ETH fluctuating between $1,100 and $1,700.

However, Steakhouse Financial is considering whether it is worth converting excess stETH into stablecoins so that it can more calmly deal with potential changes in market conditions that could cause an increase in operating expenses.

At the moment, it appears that most LidoDAO members favor the partial sale and staking of a slice of the 20,304 ETH currently stuck in its Aragon smart contract.