• Wed. Feb 21st, 2024

As Liquid Staking Meets Its End, LDO Token Experiences A Major Drop

Summer White

BySummer White

Mar 9, 2023

The LDO token that is based on the Lido project has taken a huge fall. The data shows that the trading price of the asset has plummeted substantially throughout the past week.

The entire reason behind the fall of the LDO token is the recent planning revealed by the officials at the Lido project. They have intimated that they may shut down the entire liquid staking process.

LDO Token Falls Tremendously

Lido Finance was launched as a major staking solution on the Ethereum blockchain. The platform soon took flight as one of the most successful staking solutions in terms of adoption and investments.

Later, the project launched its own governance token to give more freedom and control to the users. The governance token was reportedly dubbed “LDO”.

Ever since the launch, the token kept gaining strong momentum and its value rose tremendously in the crypto market.

It was among the highly adopted and popular tokens in the cryptocurrency industry. However, the token seems to have met its demise lately as its trading price has been plunging for some time.

The token’s demise came just as the officials at Lido Finance made an announcement about the discontinuation of their liquid staking protocol.

The executives at the protocol have announced that they are thinking about shutting down their liquid staking platform for two major protocols.

The reports confirm that the platform is thinking about dropping Kusama and Polkadot from the list.

LDO Suffers a Weekly Loss of 18%

Since the announcement, the value of the token has been declining. The report shows that in the past 24-hours, the value of the token has dipped more than 6%.

As for the past week, the value of the LDO token has plunged by 18%. This is a huge plunge witnessed by the token compared to any other token that falls in the same league as the LDO token.

At the time of writing, the LDO token trades at a low of $2.37, and the entire Lido Finance community is stunned due to the platform’s latest decision.

LDO is Facing a Huge Decline

It is important to mention here that the entire cryptocurrency market is facing a decline lately. Even the likes of Bitcoin and all major altcoins are facing a downward trend.

However, the declines they have witnessed in the past 7 days are somewhere around 6%. On the other hand, the demise of the LDO token alone is over 18%, which is very alarming.

Therefore, the analysts have started coming up with their own explanations as to why the asset has kept falling below the strong support levels.

Although other cryptocurrencies have also been rejected from the strong resistance levels their declines have not pulled them to levels as low as LDO.

Possible Reasons behind the Decline

With the analysts coming up with their explanations, the most up-voted explanations include the SEC intervention and the MixBytes dilemma.

The first possible reason behind LDO’s demise is the involvement of the US Securities and Exchange Commission (SEC).

The SEC recently won a case against Kraken, a major crypto exchange where it was able to prove that the staking services offered by the exchange were unregistered.

Following the win, a huge wave of fear was sent across the US crypto industry and especially, among the firms offering or supporting staking services.

This is where MixBytes comes in, which helped Lido Finance develop and offer the staking services for Kusama and Polkadot.

Following SEC’s win, MixBytes has become fearful of becoming its next target. Therefore, it has decided to stop supporting the staking services alongside Lido Finance.

As Lido Finance was dependent upon MixBytes’ expertise for running the staking platforms, it has thus, started reviewing its staking operations.

Then comes the second reason which is also MixBytes. The grieving news for Lido Finance is not just MixBytes ending its staking service but the firm ending its ties with the platform.

MixBytes has announced that it is no longer going to support Lido Finance, which technically ends its partnership with the latter.

Summer White

Summer White

Summer White, an esteemed writer for Big Trends Signals, combines her online trading expertise and articulate writing to deliver exhaustive guides and fair reviews, assisting traders in digital markets.

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