Lido Finance: How these factors helped LDO climb 33% after V2 reveal

• Node operators, external development, and validators could benefit from the increased involvement in Lido staking.
• The LDO price has the potential to trend upward before the proper Lido V2 launch.  

Thirteen days after Lido Finance [LDO] announced its V2 upgrade, the largest since its launch, the token’s value has increased by 33%.

Needless to say, the development played its part in the uptick. But there were missing pieces that might have been overlooked over the course of the surge.

How much are 1,10,100 LDOs worth today?

The Lido stakes have the say

According to the Token Unlocks dashboard, Lido’s position as the biggest player in the Ethereum [ETH] liquid staking sector was not void of contribution.

@LidoFinance remains the largest player in the liquid staking $ETH market, with 5m+ staked $ETH, accounting for ~1/3 of all staked $ETH

The second largest player holds just 1m staked $ETH

We have also discussed other LSD protocols in this tweet 👇: https://t.co/fgzpyq9rol

2/11 pic.twitter.com/bVKbCEjEMx

— Token Unlocks (@Token_Unlocks) February 20, 2023

An assessment of the entire staking system showed that LDO was far above the likes of Rocket Pool [RPL] and StakeWise. In fact, the amount of staked Ether [stETH] was almost five times its closest competitor.

Source: DeFi Llama

Besides that, LDO’s Annual Percentage Rate (APR) was 4.9% with 10% of the fees split between the Node Operators (NOs) and the Decentralized Autonomous Organization (DAO).

The NOs act as staking providers who ensure funds’ safety and correct validator operation. 

Moreso, the APR offered by Lido, and its staking adoption, beats that of Curve Finance [CRV], AAVE, and Convex Finance [CVX]. Consequently, this was vital to the attention LDO got after Brian Armstrong raised alarm about the regulatory hunt after centralized staking.

Source: DeFi Llama

In terms of the Lido V2, the architectural design allows stakers to experience reduced downtime while validators get a number of stETH in return.

NOs, developers, and the LDO price action 

Still, on the V2, Lido confirmed that the Node Operators would help with staking router participation while earning commissions. Since this enables new staking potential, it implies that more validators looked in Lido’s direction, and many more might come.

On the implementation, Lido Finance welcomed the idea of external developers. However, the contribution would include no preferred set of fees, collateral, or security, as the protocol would handle all that.

So, with all these in place, can LDO surpass its performance before the month comes to a close?

Read Lido Finance’s [LDO] Price Prediction 2023-2024

According to CoinMarketCap, LDO’s price was $3.01, losing 4.31% in the last 24 hours. But in the short term, the Exponential Moving Average (EMA) revealed that the token might exit the region soon.

At the time of writing, the 20 EMA (blue) crossed the 50 EMA (yellow). This means that LDO could establish a new uptrend.

Source:TradingView

In addition, the Chaikin Money Flow (CMF) went above equilibrium and was positioned at 0.02. The indicator measures the accumulation and distribution of an asset.

Since the price action closed above the midpoint, it implied that LDO had strength in the market.