Lido: Interest in stETH wanes, what’s next?

• stETH new address count has remained the same in the last year.
• On the other hand, rETH and SFRXETH have seen an increase in new demand post-Shanghai.

The count of new addresses holding Lido’s Staked Ether [stETH] remained unchanged in the last year, despite a notable rise in demand for the DeFi token, data from Glassnode revealed. 

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

According to Glassnode, the daily count of new addresses holding stETH fluctuated between 230 to 590 per day, remaining stagnant on a year-to-date basis. This suggested that “many new deposits made via Lido are driven by existing stETH token holders increasing their exposure” and not through the entry of new participants into the market. 

A look at stETH’s average token holder balance metric revealed that following a momentary decline in the average balance of token holders after withdrawals were enabled for Lido post-Shanghai Upgrade, an uptrend was spotted, suggesting a growth in demand for the token.

However, with the new address count staying unchanged, Glassnode noted,

“We are yet to see an appreciable influx of new holders entering the market via these staking mechanisms.”

Conversely, there has been a surge in the new users of the staking tokens from Rocketpool [rETH] and Frax Finance [SFRXETH] following the Shanghai upgrade. According to data from Glassnode, since 12 April, the count of new addresses holding rETH and SFRXETH has climbed by 45% and 122%, respectively. 

Source: Glassnode

Lido remains king

Despite this, Lido’s tenure as the number one liquid staking protocol continues unchallenged. Per Glassnode’s recent report,

“Lido stands out as the clear leader in the sector with its supply 16 times higher than its nearest competitor.”

Per Dune Analytics, Lido’s share of the ETH staking ecosystem has also grown to levels last seen in May 2022. While many anticipated a decline in Lido’s market share following Shanghai, the opposite has been the case.

Since the hardfork upgrade on 12 April, the total value of ETH staked on Lido has climbed by 32%. 

Source: Dune Analytics

However, while Ether staking on the protocol rallied, there has been a persistent drop in ETH staking APR offered by Lido. At press time, this was 3.9, a low last recorded in September 2022. 

Source: Dune Analytics

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Waning demand for LDO

At press time, LDO traded at $1.92, according to CoinMarketCap. An assessment of the alt’s price performance on a daily chart revealed a weakening accumulation pressure.

Key momentum indicators were in downtrend positions at the time of writing, indicating that LDO distribution was beginning to overpower accumulation.

Source: LDO/USD, TradingView