Lido witnesses surge in staked deposits: Will LDO’s development be sustainable?

• Lido witnessed surge in staked deposits, TVL grew as properly.
• Unfavorable lengthy/brief distinction instructed potential promoting stress as costs rose.

During the last week, the Lido [LDO] protocol witnessed a surge within the variety of staked deposits on its platform. Based on a tweet on 24 January, the variety of staked deposits on Lido elevated, besides that of Solana [SOL].

🖥️ Lido on L2

Following a wave of integrations and continued LDO incentives, wstETH continued its development on L2:

– @arbitrum: 22,856 wstETH (7d: +2.01%)
– @optimismFND: 14,945 wstETH (7d: +3.03%) pic.twitter.com/1h10vbW0lN

— Lido (@LidoFinance) January 23, 2023

What number of are 1,10,100 LDO value in the present day

Thus, extra customers have been selecting to stake their holdings via the Lido platform at press time, indicating that the protocol nonetheless had potential for development.

Together with the surge in staked deposits, there was additionally development noticed in Layer 2 options. Particularly, Wrapped stETH [wstETH] elevated by 2.01% during the last week on Arbitrum and by 3.03% on Optimism [OP].

This instructed that extra customers have been turning to Layer 2 options to stake their belongings and Lido was benefiting from this pattern.

All of those components impacted Lido’s TVL, which grew by 7.77% within the final week.

Nevertheless, regardless of the rising TVL, the variety of distinctive customers on Lido declined. Prior to now month, the general variety of distinctive customers on the Lido protocol fell by 7.31%. This implied that whereas extra customers are staking their belongings on Lido, fewer have been actively utilizing the protocol and fascinating with its companies.

Despite the fact that the variety of distinctive customers on the protocol declined, the income generated by Lido elevated by 6.31% during the last week, based on Messari. Thus, Lido was nonetheless producing earnings and will showcase development on this space.

LDO faces stress

These components have contributed to the expansion of the LDO token’s costs. Nevertheless, the rising costs of the LDO token additionally impacted its MVRV, which grew alongside the LDO’s worth. A excessive MVRV indicated that LDO holders would revenue in the event that they ended up promoting their positions.

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Moreover, the lengthy/brief distinction was additionally adverse, suggesting that almost all addresses holding LDO have been short-term holders. These short-term holders might find yourself promoting their positions for a revenue and affect LDO’s costs negatively.

It stays to be seen how lengthy Lido can retain its dominance and development. On the time of writing, the worth of LDO was $1.01 after rising by 0.71% within the final 24 hours, based on CoinMarketCap.