Here’s why the growth of token staking could be bullish for Lido (LDO)

Liquid staking has grown successful popularity implicit the past twelvemonth acknowledgment successful portion to the motorboat of the Ethereum beacon concatenation and the inability of ETH stakers to retreat their tokens until the afloat motorboat of the consensus layer. 

As a result, Lido (LDO) has established itself arsenic a person successful the liquid staking sector. Lido is 1 of the main staking protocols for respective fashionable tokens and it allows token holders to gain an other output by putting their staked assets to enactment successful decentralized concern (DeFi).

LDO/USDT 4-hour chart. Source: TradingView

Data from Cointelegraph Markets Pro and TradingView shows that the terms of LDO trended higher passim the period of March and past entered a consolidation play successful aboriginal April. Currently, the wider marketplace is successful a crisp downtrend, but the maturation of the staking assemblage and upcoming Ethereum "merge" could inactive pb to bullish outcomes for LDO.

Expanding liquid staking options

LDO terms reversed inclination toward the extremity of February and this was successful portion owed to the summation of Polygon (MATIC) liquid staking to the Lido protocol, which was developed successful conjunction with Shard Labs.

— Lido (@LidoFinance) March 2, 2022

At the clip of writing, determination is much than $14.5 cardinal worthy of MATIC staked connected Lido and it is earning a 8.7% yield. The protocol presently allows staking of ERC-20 MATIC tokens and stakers person stMATIC successful return, which tin beryllium utilized successful DeFi protocols connected the Ethereum and Polygon network.

The summation caller assets, arsenic good arsenic an summation successful the magnitude of Ether staked connected Lido sent the full worth locked connected the protocol to a record-high $20.83 cardinal connected April 5 and presently this fig stands astatine $18.3 cardinal according to data from Defi Llama. 

Total worth locked connected Lido Finance. Source: Defi Llama

New partnerships and integrations summation Lido's marketshare

Investments from institutions and integrations with different protocols besides overgarment a bullish representation for LDO. The task precocious received a $70 cardinal concern from Andreessen Horowitz’s steadfast a16z firm.

— Lido (@LidoFinance) March 3, 2022

Along with the $70 cardinal investment, a16z besides revealed that it would beryllium staking a information of its Ether holdings connected the level arsenic a mode to assistance trim immoderate of the operational complexities for organization investors.

Lido besides benefited from aggregate integrations passim March and April, including staked Ether (stETH) being added to the lending pools connected AAVE. Staked Solana (stSOL) was besides integrated connected aggregate platforms successful the Solana ecosystem, including Raydium, Friktion Finance and aggregate protocols adding enactment for staked Terra (stLUNA).

Related: The galore layers of crypto staking successful the DeFi ecosystem

Enhancing decentralization could pull investors

Another origin that could assistance boost the guardant outlook for LDO is the developers' absorption connected enhancing the decentralization of the protocol.

One measurement successful this process is the adoption of Distributed Validator Technology (DVT), which groups validators into autarkic committees that suggest and attest to blocks unneurotic arsenic a mode to assistance trim the hazard of an idiosyncratic validator underperforming oregon misbehaving.

This helps to simplify and velocity up the process of adding caller node operators (NOs) due to the fact that caller operators tin beryllium paired with a radical of bulk trusted NOs to assistance alteration imaginable risks.

A 2nd betterment includes the quality to involvement based connected a Node Operator Score which is derived from respective metrics and this helps supply an inducement to operators to support optimal performance.

One last betterment is the instauration of caller mechanics specified arsenic longer time-locks and giving veto rights to a quorum of stETH holders arsenic a mode to mitigate the hazard of governance seizure to forestall unplanned changes to Lido.

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