DeFi Token Powering Ethereum Staker Lido Finance Jumps 18%

By August 11, 2022Ethereum
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When crypto prices rise, speculators call the move bullish. PHOTO: Unsplash
When crypto prices rise, speculators call the move bullish. PHOTO: Unsplash

The native token behind the popular Ethereum staking platform Lido Finance has rallied more than 18% over the past 24 hours.

LDO, the 62nd-largest token with a market capitalization of nearly $860 million, is now changing hands at $2.75, according to data from CoinMarketCap.

One of the primary reasons behind today’s bullish price action is likely the successful completion of the final test merge early Thursday morning. The Goerli merge, named after the Ethereum testnet Goerli, is the last test before the mainnet merge expected on September 19.

The merge event will migrate Ethereum, which is currently operating on a proof-of-work (PoW) consensus mechanism, to a more energy-efficient proof-of-stake (PoS) consensus mechanism.

Besides improving network efficiency, the upgrade is also expected to increase Ethereum’s transaction speed and better security. Still, there are drawbacks; notably, it will cost users 32 Ethereum, or roughly $60,000 at current prices, to become a network validator.

To get around this hefty sum, Lido has offered retail users a workaround.

Instead of staking $60,000 in Ethereum, Lido lets anyone earn a yield on any amount of Ethereum staked with the platform. At current, Lido offers a 3.9% yield for stakers.

The total value locked (TVL) on Lido Finance holds a total of $8.28 billion, which suggests data from DefiLlama.

Lido has nearly 48,881 unique depositors collectively staking more than 4.14 million Ethereum, according to data from Dune Analytics.

Lido and DeFi

Besides Lido, other leading tokens within the decentralized finance (DeFi) sector include Curve (7.8%), Sushi (10.58%), Compound (8.2%), and Aave (11.95%) have also extended their bullish action over the past 24 hours.

Ethereum, the second-largest cryptocurrency with a market capitalization of $229 billion, has also gained 10.58% over the past 24 hours.

Ethereum trades at around $1,885, up 80% over the past 30 days, according to data from CoinMarketCap.

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