Key Points
- Lido Finance’s market share in the Ether staking market has dropped to a one-year low.
- Significant withdrawals from the protocol have resulted in a decrease in Lido’s market dominance.
Lido Finance, a liquid staking protocol, has experienced a significant decrease in its market share. The protocol’s dominance in the Ether staking market has fallen to a level not seen in a year.
Lido’s Declining Market Share
The Dune Analytics dashboard indicates that the proportion of ETH deposited to the beacon chain via Lido middleware stood at 29.1% at the time of reporting. The last time this figure was below 30% was in February 2023.
Throughout the year, Lido’s market share has fallen by 8%. This decline is attributed to a surge in withdrawals from the liquid-staking protocol over the past month.
Withdrawals Exceeding Deposits
On-chain data from Dune Analytics reveals that withdrawals from Lido have surpassed deposits made through the protocol since the 12th of March. As the staking platform with the most outflows in the last week, Lido’s withdrawals totalled 117,000 ETH at the time of reporting, valued at 35.69 million USD.
The protocol has seen an increase in withdrawals as the Annual Percentage Rate (APR) offered to users staking on the platform has decreased. By the 10th of April, the user APR, calculated using a seven-day moving average, was 3.28%, a 14% decline since the 11th of March.
Lido’s native token, LDO, was trading at $2.61 at the time of reporting. Over the past month, its value has fallen by over 20%, as per data from CoinMarketCap.
The protocol’s weekly chart suggests a potential further decline in the midterm. The Chaikin Money Flow (CMF), which assesses the inflow and outflow of money for the asset, had crossed the zero line at the time of reporting, indicating a potential downward trend.
The Relative Strength Index (RSI) of LDO, which was 40.69 and further declining at the time of writing, confirms the increase in LDO distribution. This RSI value indicates that market participants are more inclined to sell their LDO holdings rather than accumulate more tokens.
Furthermore, the dotted lines of LDO’s Parabolic SAR indicator were positioned above its price at the time of reporting. This bearish signal confirms that the asset’s price is in decline, and the fall will continue if market sentiment remains unchanged.
