- The Lido Finance files the largest daily influx of ETH shares ever.
- LDO is currently suffering from buyer burnout.
In a tweet Posted on February 25, Leading Ethereum (ETH) liquid staking platform Lido Finance [LDO] confirmed that it recorded the largest daily stake inflow with more than 150,000 ETH staked.
The Lido protocol has recorded the largest daily stake inflow so far with more than 150,000 ETH staking. 🎉
Once you reach that number, a weird (but important) protocol security feature called Stake Rate Limit is activated.
See how it works🧵👇 pic.twitter.com/ngBtWz7q18
— Lido (@LidoFinance) February 25, 2023
On-chain Details Lookonchain found that the 150,000 ether tokens in question had been staked by Tron founder Justin Sun.
In the early hours of February 26, Sun staked an additional 10,000 ETH, bringing his total ETH stake portfolio to 200,100 ETH, worth about $320 million.
Justin Sun bet 10,000 $ETH($16 million) in @LidoFinance again just now.
He is currently betting 200,100 $ETH ($320 million).
And received $18.68 ETH income within 24 hours, APY is ~3.6%.https://t.co/oZxE8KpjHy pic.twitter.com/OSFlkIUOGM
— Lookonchain (@lookonchain) February 26, 2023
According to Lido Finance, the increase in staked ETH in a one-day trade led to the activation of the protocol’s security feature known as the Quotation Rate Limit.
The Stake rate limit is used in Lido as a dynamic mechanism to ensure the security of the protocol and avoid the dilution of rewards caused by large inflows of bets.
Based on recent deposits, this mechanism reduces the total amount of stETH that can be minted at any time using a 24-hour sliding window.
Is your portfolio green? Check out the LDO Profit Calculator
The protocol capacity is replenished per block, with a recovery rate of approximately 6,200 ETH per hour. The limit applies to all parties trying to mine stETH, regardless of the method used.
State of ETH staking on Lido
According to data from Dune Analytics, 5.35 million ETH tokens have been staked through Lido Finance, bringing its share of the ETH staking market to 29%.
With the Shanghai Upgrade scheduled to take place in a few weeks, the past few months have seen a surge in the creation of new ETH liquid staking protocols, leading to a gradual decline in Lido’s market share.
To provide context, Lido Finance held 32% of all ETH staked as of May 2022. However, with centralized staking platforms such as Coinbase offering higher annual percentage rates (APRs) to liquidity providers, these platforms have seen an increase of the ETH stake.
As for the APR bet on the Lido, it was pegged at 4.74% at press time. It peaked at a high of 10.20% last November and has been on a downward trend since then.
Source: Dune Analytics
How much are 1,10,100 LDOs worth today?
LDO in the last 24 hours
At press time, LDO traded hands at $3, with its price jumping 10% in the past 24 hours. However, while the price of LDO rose, trading volume fell by 19% over the same period, according to data from CoinMarketCap.
This kind of price/volume divergence is usually common in a market where buyers are running out. This suggests that a potential reversal in LDO’s price was imminent if the liquidity needed to push its price higher does not enter the market.