Assessing Lido’s dominance in the LSD sector
- Eigen Layer observed a massive tick in its deposits and gained province in the LSD space.
- Lido continued to see growth, with its token price seeing green.
The Lido [LDO] protocol has been one of the most prominent networks in the LSD sector. It also gained the most from the crypto community’s rising interest in liquid staking.
However, with the rise in interest, the competition also grew. EigenLayer recently achieved a Total Value Locked (TVL) milestone by surpassing $1 billion.
This achievement followed the introduction of six new liquid staking tokens to their platform. Additionally, EigenLayer expanded its global cap from 120,000 ETH to 500,000 ETH.
EigenLayer has just surpassed $1 billion in TVL after introducing 6 new liquid staking tokens and raising their global cap from 120k ETH to 500k ETH. pic.twitter.com/YrS8mEX3Sw
— ASXN (@asxn_r) December 22, 2023
Even though the LSD space is getting crowded, Lido protocol stands to benefit from this. A major chunk of deposits made to the Eigen Layer were from the massive amounts of stETH being deposited into the protocol.
The popularity of stETH will play a crucial role in Lido’s growth in the future. Along with the stETH’s fame, Lido’s governance may also have a hand in the growth of the protocol.
Lido governance faced a scenario where one of its collaborators, InfStones, encountered technological challenges. To mitigate potential risks, InfStones proactively halted certain operations, addressed the issues, and implemented additional measures to enhance system security.
Subsequently, the Lido community engaged in a deliberative process to decide whether to reinstate InfStones. After thorough discussions, they concluded that InfStones had effectively rectified the technical issues.
Consequently, the community granted approval for InfStones to resume its previous activities.
The swift action taken by the Lido DAO showed that despite the protocol growing rapidly, the governance can still make quick decisions that can help the protocol in the long run.
How is LDO doing?
The growth of Lido was reflected in its price movements as well. At press time, LDO was trading at $2.32 and its price had grown by 5.52% in the last 24 hours.
Realistic or not, here’s LDO’s market cap in BTC’s terms
The network growth of the token also increased during this period. This meant that new addresses were interacting with the LDO token much more frequently than usual.
Only time will tell whether LDO will be able to retain this kind of momentum.