Lido performs relatively better than the rest of the crypto market



Following the collapse of FTX, the cryptocurrency market experienced some turbulence, but Lido Finance, a liquid staking technology, stood out among the chaos. Since October 26, the Lido protocol has generated at least $1 million in fees every day, according to data from DeFiLlama.

To determine why this trend has persisted, let’s look at the fundamentals of the channel.

Prior to FTX’s collapse in May 2021, Lido began to grow. On Nov. 10, fees hit an all-time high, with fee revenue nearly surpassing $2.6 million. 10% of all Ethereum staking rewards from user deposits go to the protocol.

The data also demonstrates that an increase in Lido fee capture corresponds to a steady increase in Ethereum PoS consensus deposits.

Due to the fact that Lido forwards received Ether to the staking protocol, its fee revenue scales in parallel with Ethereum Proof-of-stake (PoS) revenue. Decentralized exchange (DEX) activity has increased since the collapse of FTX, which has boosted Ethereum activity. On Nov. 8, Ethereum saw $9.1 million in fees and $7.3 million in revenue, both of which marked a 30-day high.

The Lido protocol now has 150,000 unique depositors, which shows that Lido is still attracting new users. Following the weakness of centralized “earning” programs caused by their exposure to FTX, Genesis, BlockFi and other companies, there has been an increase in unique deposits.

On Lido, the number of daily active users and Lido Token (LDO) holders are also growing. Data from Token Terminal indicates that on November 17, the number of daily active users hit a 90-day high of 837, further reinforcing the platform’s upward trend.

The market valuation of LDO tokens is not keeping up with the rise in Lido fees, deposits and income.

As already noted, on November 10, Lido hit a record number of fees at the same time as its market capitalization increased from $1.2 billion to $663.7 million.

At the time of writing, the cost of LDO tokens has dropped from $1.80 to $0.90.

Despite the general decline in the market, Lido is showing excellent fundamentals on several levels. The growth and sustainability of a DeFi platform can be gauged using several key metrics, including consistent growth in DAUs, revenue, and new unique members.

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