Lido TVL surges: How did Ethereum, Solana help?

Posted: September 20, 2023

• The TVL of Lido on the liquid staking protocol increased last week.
• Interest in LDO has flattened amongst the token’s futures market participants.

Lido [LDO], a liquid staking protocol for Ethereum [ETH], saw its total value locked (TVL) surge in the past week due to an uptick in ETH and Solana [SOL] deposits, the protocol noted in its latest weekly update on X (formerly Twitter). 

⚡️Lido TVL

Lido’s TVL increased slightly this week (7d: +0.84%), mostly driven by a growth in ETH and SOL deposits.

TVL finished the week at $14.17b. pic.twitter.com/gHCGxLazpK

— Lido (@LidoFinance) September 18, 2023

Between 11 and 18 September, ETH and SOL deposits on Lido grew by 0.53% and 8%, respectively, resulting in a 1% growth in Lido’s TVL. 

Is your portfolio green? Check out the LDO Profit Calculator

During that period, the values of these Layer 1 (L1) coins grew by 0.18% and 3.01% respectively. This is noteworthy, as the fall in the prices of these assets often impacts Lido’s TVL growth. 

At press time, Lido’s TVL stood at around $14.35 billion, with a 3.11% rally in the last month. 

During the period under review, the liquid staking platform led as the protocol with the most net new deposits to the Ethereum Beacon Chain.

According to data from Dune Analytics, new deposits to the Ethereum Beacon Chain through Lido totaled 68,096 ETH in the form of staked coins. This represented a 20% jump from the 56,512 ETH recorded in new deposits in the previous week. 

Source: Dune Analytics

Over the last week, the Annual Percentage Rate (APR) of the protocol’s staked Ether [stETH] assessed on a seven-day moving average saw a minor decline of 2%.

For context, Lido’s APR has trended downward since May. On 12 May, Lido’s stETH APR peaked at 7.17% and has since fallen by 49%.

Source: Dune Analytics

Further, within the period under review, the amount of wrapped staked Ether [wstETH] deposited for trades across decentralized finance (DeFi) pools increased by 0.08%. This came after the previous week’s decline of 5.72% due to stETH’s removal from the Lybra Finance pool.

Regarding Layer 2 (L2) platforms, data from Dune Analytics showed a 2% and 14.13% increase in the amount of stETH bridged to Arbitrum [ARB] and Polygon [MATIC], respectively. 

On the other hand, Optimism [OP] recorded a 4.43% decrease in the amount of bridged stETH over the past week. 

Source: Dune Analytics

Interest in LDO is low in the futures market

Amongst the participants in LDO’s futures market, interest in the token has remained low since the beginning of the month. An assessment of the token’s Open Interest showed that it has lingered between $37 million and $40 million since 1 September.

Realistic or not, here’s LDO’s market cap in BTC’s terms

When an asset’s Open Interest flattens out in this manner, it suggests that the total number of outstanding derivative contracts for that asset have not been settled has not changed significantly. 

This has often been interpreted to mean a lack of interest in the market during the material time. 

Source: Coinglass