Justin Sun’s on-chain behavior stokes fear among Lido investors as…
- Justin Sun redeemed a large amount of stETH, interest in the token starts to wane.
- Lido protocol manages to do well in terms of activity and revenue.
Even though the Total Value Locked (TVL) in the DeFi market has remained relatively stagnant, there has been persistent growth in the Liquid Staking Derivative sector. Lido[LDO], as a prominent player in this sector, has played a pivotal role in driving significant interest within this domain. Its active involvement has contributed to the expansion and development of this particular market segment due to growing interest in Lido’s stETH.
Realistic or not, here’s LDO’s market cap in BTC’s terms
Flying to close to the “Sun”
However, Justin Sun’s recent behavior may cause interest in stETH to deplete. Based on recent data, it was observed that Justin actively redeemed 30,000 stETH from two separate wallets. Despite this redemption, he continues to hold the largest amount of stETH, with approximately 260,000 tokens remaining under his ownership.
his excellency just redeemed 30k stETH across 2 wallets, he’s still the biggest stETH holder with about 260k remaining pic.twitter.com/xAt1Q2LXXU
— alto | dollar.eth (@etheraltog) July 8, 2023
This redemption of stETH by Justin Sun could cause uncertainty in the market going forward. According to Santiment’s data, the weighted sentiment around stETH had started to decline materially. This indicated that the crypto community had more negative than positive things to say about the token at press time.
Additionally, it was also observed that the network growth of stETH also fell significantly in the last few days, implying that new addresses were beginning to lose interest in the stETH token.
State of Lido
At press time, however, the revenue generated by Lido and the activity on the protocol remained unaffected. According to Token terminals data, in the last week, the number of active users on the protocol increased by 40.6% causing a 2% uptick in the revenue generated by the protocol.
Even though the interest in stETH may reduce in the short-term Lido’s governance proposals to make improvements on the protocol may aid in attracting users to the network in the future.
In a recent proposal, a tiered rewards-share program was suggested that offers a percentage of the DAO’s 5% share of staking rewards to participants who stake ETH using Lido.
Is your portfolio green? Check out the Lido Profit Calculator
The rewards-share program has three phases: onboarding, rewards-share, and offboarding. In the onboarding phase, applicants are evaluated and accepted if they meet the eligibility criteria.
During rewards-share, participants earn rewards based on their stETH contributions and activities. The offboarding phase marks the end of participation. It can occur voluntarily, due to disqualification, by DAO vote, or when the rewards pool is depleted.