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‘Smart Money’ into Staked ETH Tokens
The only DeFi news platform, The Defiant, shared a post on its Twitter account on September 22, 2022, in which it added “Almost six months later, LidoFinance’s $stETH is trading back at par with $ETH.”
Nearly after six months it first “de-pegged” from Ether, investors have moved to Lido’s stETH token, pushing it back up to par with Ethereum.
As per the crypto data analytic platform, Nansen, in the recent seven days, over $33M in “smart money” from “active and prolific” investors has made a sudden change into stETH and astETH, Aave’s yield-bearing token.
Lido and its rivals in the liquid staking business had a lot riding on The Merge, the transition of Ethereum to Proof of Stake technology. The upgrade was successful without a hitch in the previous week, and made Lido a key player in the blockchain’s ecosystem. And the merge served Lido in different ways.
At present the stakers contribute to the security of Ethereum by locking their ETH and receive a modest annual return in exchange. The locked ETH can-not be used in more lucrative DeFi protocols, but Lido addresses this concern by staking user deposits of ETH and issuing derivative tokens such as stETH, that can be traded as normal ETH.
An upgrade to Ethereum named “Shanghai” is planned to enable the withdrawal of staked ETH, scheduled in mid-2023. In this upgrade, similar coins like stETH, Rocket Pool’s rETH and Coinbase’s cbETH can be redeemed on a one-to-one basis with users’ locked ETH.
In the previous week, Hal Press, Founder of crypto investment firm, North Rock Digital, shared a Tweet after the merge.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
