Lido’s wstETH sees interest on Aave, but other challenges lie ahead
- Lido’s wstETH witnesses massive interest.
- However, the number of unique users on the protocol declined.
Despite all the FUD, Lido’s wstETH was able to generate massive interest from holders.
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According to new data provided by Mark Zeller, a DAO delegate and an active participant in Aave’s governance, the demand for wstETH on the Aave protocol increased materially.
Over the past few days, the liquidity for wstETH on Aave reached 95% of the current supply cap. Due to such a high demand for wstETH, there was a new proposal laid out so that the supply cap for wstETH can be increased.
Some challenges for Lido
Even though the demand for Lido’s wstETH increased, the overall interest in the Lido protocol itself, fell.
This was indicated by the number of unique users on the protocol which started to decline. According to Messari’s data, the number of unique users decreased by 0.34% in the last week.
The fall in APR may have impacted the decline in unique users on the protocol. Based on Dune Anlaytics’ data, it was seen that the APR of Lido fell from 10.2% to 5.25% over the past few months.
Whales begin to swim in Lido
Along with the protocol, the LDO token’s health was also impacted.
A falling network growth implied that the number of times LDO transferred for the first time by new addresses, declined. Coupled with that, the velocity of LDO also fell. This implied that the frequency with which the LDO was being transferred amongst addresses, went down.
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A decline in activity and network growth did not deter whales from holding on to their LDO. According to Santiment’s data, the interest from large addresses increased over the last week, despite falling prices.