stETH Redemptions Impact Lido; Figment Gains Market Share

Analyst Ben Lilly from Jlabs Digital reported significant shifts in stETH redemptions from Lido, with Figment gaining market share, possibly indicating a move as the ETF’s staking partner.

These shifts could impact collateral and risk profiles within the DeFi ecosystem, as 278,000 wstETH faces potential liquidation risks, affecting the broader crypto lending landscape.

Figment Captures Market Share Amid Lido’s stETH Redemptions

As reported by analyst Ben Lilly on August 15th, stETH is being redeemed from Lido. Figment is capturing significant market share from Lido, possibly as the newly engaged ETF staking partner. He highlighted that around 32% of stETH is used as collateral on lending platforms.

This movement of stETH is causing significant shifts within lending protocols. A notable 278,000 wstETH is flagged as being in a “high-risk” collateral state, potentially signaling forthcoming liquidation events within the DeFi space.

The DeFi industry is attentively watching these changes, with Jlabs Digital emphasizing the importance of such on-chain data analysis. However, no direct statements from Figment’s leadership have confirmed these strategic shifts. Ben Lilly concludes, “Our team uncovers alpha and builds autonomous execution solutions” as per BlockBeats News.

Historical Context Shows Risk During stETH Volatility

Did you know? In mid-2022, a similar decoupling event involving stETH led to significant liquidations, showcasing the volatile nature of collateralized DeFi assets.

According to CoinMarketCap, Ethereum (ETH) is valued at $4,633.47, with a market cap of $559.30 billion, marking a 3.07% decrease over 24 hours but an 80.07% rise over 60 days. Ethereum dominance rests at 13.83%.

The Coincu research team notes the potential for significant liquidation events if prices drop, impacting ETH and associated derivatives like stETH and wstETH. Historical data suggests heightened alertness is warranted, with precedents pointing to rapid asset price shifts and governance disruptions. Reacting quickly to these events is vital for mitigating risks, stressed Lilly.