The LDO token, which powers the decentralized finance (DeFi) protocol Lido Finance, is currently the biggest gainer in the cryptocurrency market. According to CoinGecko, the token has appreciated 16.5% in the last 24 hours, the highest among the top 100 cryptocurrencies in the market. In terms of price, an LDO is worth around BRL 6.21, which gives it a market value of around BRL 5 billion. With that, LDO occupies the 41st position among the largest cryptocurrencies on the market. Such numbers made Lido Finance reach another record: it is the largest DeFi protocol in terms of total allocated value (TVL). In this sense, Lido has US$5.98 billion allocated, against US$5.92 by MakerDAO, which ranks second. The appreciation of LDO and its protocol was mainly due to Ether (ETH) staking, which started to gain momentum in 2021. With the implementation of The Merge last year, Lido became the main ETH staking service and became benefited from the high demand for the service.
DeFi bounces back and grows again
Meanwhile, the total market cap of the DeFi market is also recovering on Monday (2). On the short-term charts, consecutive green candles were recorded, indicating gains in value. In total, the aggregate value of all DeFi tokens reached $31.3 billion as of Monday morning. After a slight retraction, it stood at US$31.22 billion at the time of writing. But as per the chart below, the current values still represent a big bullish impulse.
DeFi value growth. Source: TradingView. According to data from the DeFi Llama website, the TVL registered in the Lido increased by almost 2% in the last day, boosting the protocol’s records. In fact, Lido Finance recorded the highest growth among the major protocols in this market. By contrast, TVL on other major platforms like Aave, Curve, and Uniswap was much lower, in the $3.7-$3.3 billion range.
ETH staking strengthens Lido
Lido is an ETH staking solution aimed at long-term users of the second-largest cryptocurrency. It allows users to stake their ETH tokens and leave them earning interest while not planning to sell their tokens. Lido’s popularity lies in the fact that the protocol does not require minimum deposits. This means that in order to bet on the Lido platform, users do not need to have essentially 32 ETH, which is the amount required by The Merge. At the current price, this represents a sum of BRL 208,000, inaccessible to most users. With the new Ethereum (Shanghai) upgrade set for March, the narrative for Lido is developing further. EIP-4895 is part of said update and will allow withdrawals of Ether left in staking, something that is not yet possible. In fact, a recent report by Nansen revealed that the value of ETH staked alone would be the equivalent of one of the top six cryptocurrencies by market capitalization alone. Furthermore, traders are leveraging ETH through different Liquid Staked Derivatives. Notably, over 5.7 million ETH was left staking through platforms like Lido and Rocket Pool. Nansen noted that the pace of adoption only “gained steam” after The Merge and there was “significant participation” from owners. Read also: Bitcoin Core developer loses more than 200 BTC with alleged private key theft
