Over the past 7 days, Lido’s LDO token has seen a 62.5% increase. Let’s take a look at the reasons behind this performance.
Lido’s LDO price climbs 62.5%
Over the past 7 days, Lido’s LDO token has been the best performer in the top 100 cryptocurrencies, with a 62.5% increase at the time of writing. After a correction of nearly 30% at the end of July, the asset continues its summer rally, with August currently showing an increase of nearly 57%:
Among the reasons for this increase, we can look to the Securities and Exchange Commission (SEC). The SEC has clarified important points about staking, bringing some peace of mind to Lido. It is now clear that the protocol’s staking services do not constitute an offer of securities.
As a result, the market welcomed the news and LDO was able to take advantage of this wave of optimism.
To a lesser extent, Lido may also benefit from Ethereum’s return to the forefront, with ETH regaining the $4,000 mark. On the staking side, Lido offers 2.7% annual returns on Ethereum, with $38.31 billion currently deposited on the protocol. While approximately $151.6 billion worth of ETH is used to secure the Ethereum blockchain, Lido accounts for 25% of this total locked value.
In terms of revenue, DefiLlama data currently reports $300,000 per day. After falling to $119,000 in April, this statistic has now returned to its levels at the beginning of the year:
Nevertheless, we will need to keep a close eye on the protocol’s revenue trends over the coming months, as we recently highlighted significant outflows from ETH staking, which could suggest that profit-taking is on the horizon. Mechanically, this could contribute to a decline in Lido’s revenue in the short term, and to date, the outflows have continued. Over a rolling 30-day period, the number of validators has thus decreased by 0.75%.
Furthermore, although LDO is performing very well in the short term, the token is still a long way from its all-time high (ATH). This ATH was reached almost four years ago, on August 20, 2021, at $7.3 per unit. At the time of writing, LDO is trading at $1.49, up 4.2% over 24 hours. With a market capitalization of $1.33 billion, the asset ranks 92nd in the cryptocurrency rankings.
