Lido on a quest for staking supremacy?

• A new Lido proposal offered 5% of the DAOs’ reward for staking through Lido.
• Lido held over 32% of the ETH staking market.

Lido [LDO] reigned supreme in the Ethereum [ETH] staking market at press time, boasting of the largest share. However, an intriguing proposition that could potentially elevate Lido’s influence even further has emerged. What does this latest endeavor by the platform signify for the world of ETH staking?

Realistic or not, here’s LDO’s market cap in BTC’s terms

The proposed revolution to Lido staking

At press time, Lido token holders were contemplating a proposal that aimed to introduce a new and improved profit-sharing program. This proposal will incentivize partnerships with other web3 communities, adding a collaborative dimension to the ecosystem. The envisioned program would replace its existing rewards-sharing system. 

The proposal outlined a tiered rewards-share program, offering a percentage of the DAO’s 5% share of staking rewards to individuals who stake ETH using Lido. The terms also included capped limited rewards, gradual payouts, and robust mechanisms to detect and prevent abuse of the rewards program.

Voting on this proposal will conclude on 29 June, and its outcome holds significant implications for the landscape of ETH staking.

Current Lido ETH staking market share

As of this writing, data from Dune Analytics revealed that the total volume of ETH staked surpassed 23.2 million. Notably, Lido captured a significant portion of this market, with nearly 32% of all staked ETH routed through their platform.

This translated to a substantial volume of over 7.3 million ETH staked through Lido. In comparison, the closest competitor, Coinbase, held a 9.7% share of the staking market.

Furthermore, Lido offers an attractive proposition for users staking ETH and other Proof-of-Stake tokens. Those who choose to stake with Lido receive a generous 90% of the staking rewards generated from their ETH, while node operators and the Lido DAO Treasury each claim a 5% share.

Lido further enhances accessibility by issuing the liquid staking token (LST), known as stETH, enabling users to participate in staking without the need to operate their nodes. This feature allows for seamless entry and exit from staking positions.

LDO on a daily timeframe

Upon analyzing the daily timeframe of Lido’s native token, LDO, it became evident that the current developments have yet to trigger a significant market reaction, at least at the time of writing. LDO experienced a decline of over 1% in value following the previous trading session, where it saw an increase of over 2%.

The token traded around $1.9 below its short Moving Average (yellow line). Furthermore, it displayed a weak bearish trend, as the Relative Strength Index (RSI) indicated, slightly below the neutral zone.

Source: TradingView

How much are 1,10,100 LDOs worth today?

However, with the introduction of the new proposal, there is a possibility that LDO will witness increased activity as stakers are incentivized to utilize the platform.

The upcoming weeks will serve as a critical period to observe how these developments unfold and their potential long-term impact on LDO’s price trend.