The decentralized autonomous organization behind Lido – the largest Ethereum staking pool – is deliberating whether to sell or stake $30 million worth of Ether (ETH) from its treasury.
The financial unit of the DAO, Steakhouse Financial, presented on February 14 a proposal that contemplates four options, one of which contemplates staking part or all of its ETH on Lido in the form of Lido Staked ETH (stETH).
Another would contemplate LidoDAO selling part or all of its 20,304 ETH for a stablecoin.with the purpose of expanding the airstrip of the DAO.
The proposal comes at a time when ETH staking withdrawals will soon be enabled via the Ethereum Shanghai and Capella updates, which are expected to take place sometime early this year.according to the Ethereum Foundation.
While converting ETH to Staked ETH may lead to more protocol rewards, the DAO is wary that by staking too much you could risk not having enough Ether on hand “in a pinch.”
Regarding operating expenses, Steakhouse Financial said it may be necessary to trade Ether for a stablecoin to “preemptively secure an additional runway.”
Steakhouse Financial noted that with current LidoDAO inflows at around 1000 stETH per month, the DAO is earning approximately $1.3-1.5 million per month.and that the price of ETH has hovered between USD 1,100 and 1,700 in recent months.
Steakhouse Financial said those numbers alone should be “sufficient to cover monthly operating expenses.”
However, they are still deliberating whether it is worth converting excess stETH to a stablecoin to better prepare for any changes in market conditions that may lead to increased operating expenses.
A LidoDAO business development representative said that they are not particularly enthusiastic about the current state of the stablecoin market:
“Given all the FUD and rumors, both DAI due to the USDC collateral and USDC itself pose a potential risk if frozen. That being said, I do have liquidity issues with LUSD, and USDT still has its own issues.”
It seems that most LidoDAO members are in favor of partially selling and staking a portion of the 20,304 ETH locked in their Aragon smart contract.
Proposals come when the total value locked (TVL) of stETH fell 6.66% from February 6 to 13.
Lido Analytics: Feb 06 – 13, 2023
TLDR:
– Lido TVL is down -6.66%, following a -7.22% fall in the price of ETH.
– Lido led in new stake on Ethereum, with a 27% share in weekly deposits.
-new @AaveAave V3 wstETH: 34,726 (+34.87%).
– Lido on Polygon reaches 2% market share. pic.twitter.com/iWA9YccM6e— Lido (@LidoFinance) February 13, 2023
Lido Analysis: February 06-13, 2023
TLDR:
– TVL of Lido falls by -6.66%, after a fall of -7.22% in the price of ETH.
– Lido led in new participation in Ethereum, with a 27% share in weekly deposits.
– New @AaveAave V3 wstETH: 34,726 (+34.87%).
– Lido in Polygon reaches 2% market share.
Lido’s TVL is currently USD 8.130 millionaccording to the DeFiLlama on-chain metrics platform.
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
Keep reading:
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the entire amount invested may be lost. The services or products offered are not directed or accessible to investors in Spain.