Lido Finance’s most recent rise on the market has apparently been followed by a solid spike in buying power incoming from all kinds of accounts on the network. According to the on-chain data provided by LookOnChain, investors received almost $5 million worth of tokens. The reason behind the most recent rally is as yet unclear.
On Jan. 1, the price of Lido’s underlying token suddenly started moving upward, showing a solid price performance and moving ahead of the market. A strong spike in inflows to the asset led to increased attention to the asset coming from retail investors.
9 hours ago, when the price of $LDO rose from $1.24 to $1.42, an $LDO investor received 3.5M $LDO ($4.8M) and sold 500,000 $LDO ($685,000) out, with an average selling price of ~$1.37.https://t.co/FNpLOXv8Ad pic.twitter.com/23vrf7KBOb
— Lookonchain (@lookonchain) January 5, 2023
As the on-chain data suggests, among 3.5 million tokens received, almost half a million were sold on the market, at an average selling price of $1.37. Though the sum is enough to place pressure on what is already not the most liquid asset on the market, LDO successfully went through the spike in selling activities and remained at a solid price.
What does LDO rally tell us?
The price performance of LDO Itself is an important signal for investors who closely monitor the Ethereum staking market. Lido Finance is a prominent liquidity provider for all Ethereum stakers.
By delegating ETH to Lido, users receive liquid-staked Ethereum tokens, which represent the amount of Ether they have locked in smart contracts. With the help of stETH, investors remain far more liquid instead of facing unrealized losses while their funds are locked in contracts.
The scheme used by Lido has been criticized numerous times previously as it makes the staked supply distribution far more centralized and might bring problems to the whole Ethereum network in the future.
Source: https://u.today/5-million-of-lido-finance-ldo-grabbed-by-whales-causing-spike-to-13-heres-why