Lido (LDO): Shanghai’s Ethereum Upgrade Will Affect The Staking Platform By…

  • The Shanghai Update will be released in three days.
  • As a result of the update, LDO saw a surge in betting.

The coming week is extremely important for the Ethereum (ETH) community as the Shanghai update is due to take place in three days from the time of publication. There was much speculation about the potential impact, especially on Lido Finance (LDO). This is because one of the key elements of the update will be the ability to unlock staked ETH.

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Once locked ETH is unlocked, chances are that many holders will move to liquid staking platforms like Lido Finance. The latter recently deployed Lido V2 in readiness for a possible liquidity migration. The update will reportedly allow for new node operators as well as a 1:1 retirement from Lido.

How will migration affect Lido?

With most of the locked ETH already staked in 2020, there are fears that a billion-dollar cryptocurrency will hit the market. However, LDO has experienced a surge in demand for smooth staking over the past six months. Therefore, there is a high demand for staking services.


source: DeFiLlama

The sharp rise in TVL, especially from December 2022, suggested that migration was more likely than sales pressure. Despite this, there has been a decline in the amount of LDO supply in smart contracts, which has fallen over the last 30 days. However, since Feb. 18, we have seen a slight increase, suggesting that there may be a potential shift.

LDO deliveries closed in smart contracts

source: glassnode

LDO experienced little selling pressure this week, which was in line with the selling pressure seen in the cryptocurrency market. Its price of $2.77 at press time was a 16% drop from its current monthly high, but despite this, LDO still holds most of its recent gains.

LDO price action

Source: TradingView

How much is 1 10 100 LDO worth today?

The lack of a stronger pullback is obvious that there is not much selling pressure. This is in line with the address flows in Glassnode. The number of receiving addresses has been significantly higher than the number of sending addresses in the last few months, despite the slowdown in market conditions.

LDO address flows

source: glassnode

While the next few days will be critical, reasonable volatility is to be expected. There may be pressure to sell both ETH and LDO, but migrating to Lido could increase LDO demand in the medium to long term.

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