Ethereum’s upcoming Shanghai upgrade, tentatively scheduled for March, has significantly benefited staking protocol Lido Finance. The ability to withdraw ETH will reduce liquidity risks associated with locked assets, fueling a rally in its governance token LDO. The token surged over 170% in early 2023, peaking at $2.64 on January 8 before stabilizing at $1.89 (as of press time).
Lido Finance Dominates as Top Locked-Value Protocol
According to DeFiLlama, Lido’s Total Value Locked (TVL) now stands at $6.59 billion, surpassing **MakerDAO**’s $6.45 billion to become the largest DeFi protocol by TVL. Additionally, Lido leads in Ethereum staking, securing 4.65 million ETH (29.01% of all staked ETH).
Key Developments:
- Staking Router Upgrade: Lido’s January 4 community call highlighted plans to decentralize the protocol by onboarding more independent node operators. The upcoming Staking Router will enable efficient stake allocation to smaller operators while maintaining DeFi compatibility.
- Governance Momentum: Lido’s community-driven initiatives aim to enhance protocol resilience and decentralization, positioning it as a long-term industry leader.
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Whales Capitalize on Price Rally
As LDO prices soared, institutional players and whales began offloading holdings:
- SigilFund: A notable address moved 550,000 LDO (~$1M) to Binance, having previously **profited 100–200%** from strategic buy/sell actions at $1.16–$3.74.
- Nansen Founder-Linked Address: Sold 500,000 LDO while retaining 3.5 million LDO.
- KR1 plc: Transferred 1 million LDO (~$1.97M) to Kraken, holding **14 million LDO** ($27.58M) remaining.
MakerDAO’s Strategic Exit
A Debank-verified MakerDAO address sold 4.15 million LDO (converted to MKR and DAI), retaining 7.5 million LDO. This suggests bearish sentiment among institutional holders.
$15M Sell-Off in Three Days
Total sales exceeded 7.7 million LDO (~$15M), driven by:
- Market Timing: Whales locked profits amid uncertain market conditions.
- Valuation Concerns: Institutions deemed the Shanghai upgrade rally overextended, prompting price-target downward revisions.
FAQs
Q: Why did LDO surge in 2023?
A: Anticipation of Ethereum’s Shanghai upgrade, which enables ETH withdrawals, reduced Lido’s liquidity risks.
Q: What makes Lido the top staking provider?
A: Its 29% market share in ETH staking and decentralization efforts via the Staking Router upgrade.
Q: Are whale sales a bearish signal?
A: Not necessarily—profit-taking is common after rallies, but Lido’s fundamentals remain strong.
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