Lido Finance staking project surged with the ETH merge looming and the LDO token is up by 25% in the past week thanks to the upcomign upgrade so let’s read more in today’s latest altcoin news.
The native token behind the Lido Finance surged by 10% over the past 24 hours and jumped from $4.25 to $4.82 while LDO retraced since and now it is trading at $4.57. the project’s token is a governance token whcih allows holders to vote on proposals and adjust the fee parameters in Lido Finance. Today’s move is the one in the line that has been quite bullish for LDO. In the past week, the token increased by over 25% and the token was trading at $3.66 by the end of March. Looking back further, LDO has more than doubled its value over the past month.
The bullish price action behind the crypto is likely tied to the ETH 2.0 upgrade where the network will move from a PoW consensus mechansim to a PoS one. The shift was called the Merge and it is expected to occur by the end of Q2 according to ConsenSys CEO Joe Lubin. Lido Finance is a staking project which allows users to deposit their ETH holdings and earn a yield. This is quite different from providing liquidity on decentralized exchanges but the deposits are used to help secure the PoS based ETH 2.0 which was rebranded to Consensus Layer.
Just like miners on a PoW network, the PoS networks need a validator to ensure that the network is approving the legitimate transactions and rejects fraudulent transactions. Unlike the miners that demand a huge amount of computing power, the users will become validators by staking the network’s native cryptocurrency and in the case of ETH, the users can become validators by staking 32 ETH. With today’s prices, it reaches a whopping $111,921 which is quite expensive for most users.
By staking the 32 ETH that is locked up, it cannot be redeemed until the transaction was executed so it is quite a lot of money to have in limbo. The users can deposit any amount of ETH they like and earn 3.9 paid out in ETH while you cannot unstake the ETH, you will receive another crypto in exchange which will act as a receipt. The token is called Staked Ethereum which is equal to one ETH. As stETH finds more adoption in the broader DEFI ecosystem users can earn more yields on the asset on platforms such as AAve and Curve. The increased adoption along with the ETH merge anticipation has been the main reason for LDO’s rise.
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