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Lido Finance (LDO) Faces Large Spike in Selling Pressure, Here's Who Sold It

Thu, 12/22/2022 - 08:35
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Arman Shirinyan
Lido's price performance was depressing in second half of 2022, and even earliest investors see risk in holding token
Lido Finance (LDO) Faces Large Spike in Selling Pressure, Here's Who Sold It
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The price performance of Lido Finance's token on the market made LDO the least desirable financial instrument to hold for any kind of investors, as it has been gradually losing its value throughout November and December. The most recent informative post from LookOnChain might explain the behavior of the asset on the market.

Selling pressure

According to the on-chain data, one of the earliest investors of Lido Finance sold almost $700,000 worth of LDO less than 24 hours ago, which could have been the main fuel for the most recent 8% price drop.

At this point, Stani Kulechov sold all the 2 million LDO allocated on Dec. 17, 2020, making up to $1.2 per token, which leaves him with more than $2 million in profit. Unfortunately, the success of a seed investor is a devastating loss for retail holders.

Problems with Lido

Since August 2022, LDO has been moving in a severe downtrend, losing more than 70% of its value in 2022. The only period in which Lido has been showing above average performance was the pre-Merge market era, when the DAO was one of the most popular ways of gaining liquidity with the staked Ethereum.

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After the launch of Ethereum staking, Lido Finance faced a significant amount of pressure as investors raised questions about the business model utilized by the project. In exchange for staked Ethereum, Lido provides investors with a token, which is essentially a liquid representation of their locked assets. Considering the centralized nature of the token issuance, the decentralization of the whole Ethereum staking enterprise faces certain risks that may become a problem in the future.

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About the author

Arman Shirinyan is a trader, crypto enthusiast and SMM expert with more than four years of experience.

Arman strongly believes that cryptocurrencies and the blockchain will be of constant use in the future. Currently, he focuses on news, articles with deep analysis of crypto projects and technical analysis of cryptocurrency trading pairs.