The purpose of this article is to discuss the Lido Protocol as it has developed over the past six months. On Lido, we can also see how user inflow and transactions have changed over time. The total number of ethereum stakes in Lido and the top most stakeholder of Lido should also be discussed.
Introduction : Overview About Lido
Lido is another application that also offers ETH2 liquid staking. Here we can see how does it works. In essence, Lido is an Ethereum smart contract that allows ETH holders with less than 32 ETH to pool their funds and earn rewards. Pooled funds are distributed among selected operators of Ethereum validators that are required for staking operations.
Lido also solves the liquidity problem of ETH stakers by issuing a special ERC20 token, stETH, at a 1:1 ratio when users deposit their ETH for staking. StETH tokens can be traded, transferred, and used in major Defi protocols, just like ETH. If a user wishes to unstake their ETH, they can sell stETH on Curve for ETH and use it however pleases them.
What is Lido and what problems does Lido solve?
Ethereum’s transition to proof of stake (PoS) began on December 1st, 2020, with the launch of the Beacon Chain. As a result, holders of Ethereum tokens were able to earn rewards by staking their tokens to protect the Ethereum network. However, staking is not something a typical ETH cryptocurreny holder can do because it requires extensive technical knowledge to make it work. Here are some issues associated with staking ETH tokens.
1. Technical expertise: It is important for a person to have the ability to install and update software all the time so as to stay current with the latest release of the stake module. The failure to run the software due to power outages or other issues results in a loss of rewards and in the worst case, staked Ethereum.
2. No unstaking: Due to the fact that Ethereum 2.0 has not yet been launched and no deadline has been set, once ETH tokens have been staked they cannot be withdrawn until Ethereum 2.0 is launched. Because there is no deadline for Ethereum 2.0 network launch, no one knows when they will be able to withdraw their funds. Probably by the end of 2023, maybe even earlier. All depends on how quickly Ethereum core developers complete the transition from Proof of Work to Proof of Stake.
3. ETH Token requirements: In order to serve as a validator and stake tokens, one must have ETH tokens worth 32 ETH. At today’s ETH price it is more than 100,000 USD investment one must make to start earning staking rewards.
Lido tackles all these problems head on and solves them elegantly. With LIDO, anyone can stake ETH tokens even if they only have a fraction of them. Lido’s liquid staking solution for Ethereum is backed by the biggest providers.
Our dashboard discusses the Lido Protocol and its growth for the past six months, in which we followed these steps:
- Lido: Users, Transactions, and Ethereum Inflow
- Total users Inflow
- Week over week growth of users inflow
- number of Transactions
- Week over week growth of transactions
- Total Ethereum inflow
- Week Over Week Growth Of Total Inflow Ethereum
- Lido’s To 10 Stakeholders
- Top 10 Stakers Using Lido
- Top 10 Stakers Staked Ethereum On WeeklyBasis
- Top 10 Stakers Staked Ethereum On MonthlyBasis
Lido: Users, Transactions and Ethereum Inflow
Based on the below graph, we can see the number of users who have accessed Lido finance in the past six months. The total number of users between June 25, 2022 and November 25, 2022 was 50.44K. A maximum of 837 users was observed on November 17, 2022, and a minimum of 74 users was observed on June 29, 2022. Total Users are on an upward trend. On November 25, 2022 and August 15, 2022, the number of users is lower than normal, while on September 11, 2022 and September 15, 2022, the number of users is higher than normal. We can therefore conclude that the number of users has increased since Ethereum merged. As a result, users are attracted to the Ethereum Merge.
We can see from the tweet below that Ethereum Merge was launched on September 15, 2022.
And we finalized!— vitalik.eth (@VitalikButerin) September 15, 2022
Happy merge all. This is a big moment for the Ethereum ecosystem. Everyone who helped make the merge happen should feel very proud today.
We can see from the graph below that user percentage increased suddenly in the week of Sept 11-17 2022 when compared to the previous week. It is this huge change in percentage that is responsible for the Ethereum Merge.
From the graph below, we can see how many transactions took place in Lido over the past six months. In this period, we can see that the trend of transactions has been increasing. Especially from Sept 2022 onwards, we can see the number of transactions has increased most. The reason for Ethereum’s merger might be related to that. From June 25, 2022 to November 25, 2022, 54.38K transactions were recorded. The total number of transactions in November 25, 2022 and August 15, 2022 is lower than normal, while in September 15, 2022 and September 11, 2022 it is higher than normal.
We can see from the graph below that transactions percentage increased suddenly in the week of Sept 11-17 2022 when compared to the previous week. It is this huge change in percentage that is responsible for the Ethereum Merge.
From the below graph we can see the ethereum staked in Lido for the past 6 months period. The Total Eth staked between June 25, 2022 to November 25, 2022 was $434.69K. Maximum Total Eth of $36.3K was observed in October 29, 2022 and minimum Total Eth of $69.38 was observed in July 6, 2022. The Ethereum staked in Lido is showing increasing trend when we compare with the initial dates in the above analysis. Total Total Eth in October 22, 2022 and July 22, 2022 is lower than normal and higher than normal in October 21, 2022 and July 21, 2022. There is a possibility that Lido is now on L2, which may explain the sudden rise in Ethereum stakes in October 2022.
A tweet below shows that the Lido has now been upgraded to L2. This can be seen as a benefit of lower gas fees, which may result in an increase in Ethereum stakes in Lido by October 2022.
Lido is now on L2 🏝️— Lido (@LidoFinance) October 6, 2022
Bridge your staked ETH to Layer 2 protocols at the click of a button to benefit from lower gas fees and exciting DeFi opportunities.
Between June 25, 2022 and November 25, 2022, the average Eth was 1.04K. October 25, 2022 had the highest average Eth of 73.28 and September 3, 2022 had the lowest average Eth of 0.34. Between June 25, 2022 and November 25, 2022, the average Eth increased by 10% from 1.83 to 2.02. The average Eth on October 22, 2022 and July 22, 2022 were lower than normal, respectively, and on October 21, 2022 and July 21, 2022 were higher than normal.
Lido’s Top 10 Stakeholders
Staking and mining are two different phenomena related to cryptocurrency that are used for creating new coins and circulating them on the market. In mining, a miner solves computational equations to mine new coins and get rewarded. As part of staking, a staker deposits money into a cryptocurrency wallet to support the security and operation of a blockchain network. In its simplest form, staking is the process of locking cryptocurrencies to receive rewards for holding them.
Staking is a term used to refer to the delegating of a certain number of tokens to the governance model of the blockchain and thus locking them out of circulation for a specified length of timeNicole DeCicco
The following graphs show the top 10 stakeholder entities using LIDO. To identify the top stakers using Lido stake providers to stake Ethereum, we are using Lido stake providers. A total of 1.25M Ethereum stakes are held by the top 10 stakers. Only the top 3 stakers contributed more than 50% of Ethereum by using Lido of these top 10 stakers. In addition, we can see that more than quarter of the ethereum is staked by one staker, the “1inch.exchange: aggregation executor”.
Here from the below graph we can see how they are these top 10 stakers staked ethereum on weekly basis.
We can see from the graph below how these top 10 stakers staked Ethereum on a monthly basis. Over half (52.04%) of Staked Eth came from top three Stakers. During March 2022, the top user staked his entire ethereum portfolio in one attempt. Total staked by “ 1inch.exchange: aggregation executor” is in the top spot of all the top ten stakers. Moreover, the amount staked by this is the highest during April 2022.
- The above analysis indicates that the number of transactions and number of users using Lido protocol have been increasing over the last 6 months. Especially, we can see that the number of users and transactions reached a peak on Sept 15th, 2022. As a result, we can conclude that the number of users and transactions has increased since Ethereum merged. Users are therefore attracted to the Ethereum Merge because of this we can say.
- Moreover, based on the above analysis, we can see that Ethereum stakes are increasingly entering Lido. October 2022 was the month when it happened more frequently. It is possible that Lido is now on L2, which would explain the sudden spike in Ethereum stakes in October 2022. Lido may benefit from lower gas fees, which could lead to an increase in Ethereum stakes during Oct 2022.
- The above analysis shows that during March 2022, the second highest staker staked his entire ethereum portfolio. In terms of staked, out of all the top ten shareholders, “1inch.exchange: aggregation executor ” has the most staked. The amount staked by this user is the highest during April 2022. As a result, we can say that most of the stakes by top 2 occurred between March and April of 2022. Considering that the release date of Ethereum Merge is very near, we may assume that all of this has already taken place. Later, when the announcement of the postponement of Ethereum merge was made, we might think that staking of Ethereum has perhaps fallen down as we can see from all other top stakers. As a result of the bear market, we have not seen top stakeholder performance after the merger.
- Based on the above analysis, it can be concluded that Lido stakers have decreased due to the bear market. However, we hope that the overall performance in terms of inflows of users, transactions, and stakes remains at the top when compared to the other staking system. As a result, Lido can be defined as Ethereum’s first and foremost liquid staking system.
WITH rp_events as ( SELECT block_timestamp, event_name, tx_hash, event_inputs:ethAmount/1e18 as eth_amount, case event_name when 'TokensMinted' then eth_amount when 'TokensBurned' then -1 * eth_amount end as eth_amount_sign, case event_name when 'TokensMinted' then event_inputs:to::string when 'TokensBurned' then event_inputs:from::string end as wallet, event_inputs from ethereum_core.fact_event_logs where contract_address = '0xae78736cd615f374d3085123a210448e74fc6393' and event_name IN ('TokensMinted','TokensBurned') and event_removed = false ), rp_daily_by_type as ( select to_date(block_timestamp) as date, case event_name when 'TokensMinted' then 'Inflow' when 'TokensBurned' then 'Outflow' end as direction, count(case event_name when 'TokensMinted' then tx_hash end) as Inflow_txns_count, count(case event_name when 'TokensBurned' then tx_hash end) as Outflow_txns_count, sum(case event_name when 'TokensMinted' then eth_amount end ) as inflow_eth_total, sum(case event_name when 'TokensBurned' then eth_amount end ) as outflow_eth_total, avg(case event_name when 'TokensMinted' then eth_amount end ) as inflow_eth_avg, avg(case event_name when 'TokensBurned' then eth_amount end ) as outflow_eth_avg, count(distinct case event_name when 'TokensMinted' then wallet end) as inflow_wallet_count, count(distinct case event_name when 'TokensBurned' then wallet end) as outflow_wallet_count from rp_events GROUP BY 1,2 ), rp_results as ( SELECT date, sum(Inflow_txns_count) as inflow_txns, sum(Outflow_txns_count) as outflow_txns, sum(inflow_eth_total) as total_inflow_eth, sum(outflow_eth_total) as total_outflow_eth, avg(inflow_eth_avg) as avg_inflow_eth, avg(outflow_eth_avg) as avg_outflow_eth, total_inflow_eth - total_outflow_eth as net_eth_flow, sum(inflow_wallet_count) as inflow_wallets, sum(outflow_wallet_count) as outflow_wallets FROM rp_daily_by_type GROUP BY date ), lido_stakers as ( SELECT block_timestamp, to_date(block_timestamp) as date, tx_hash, event_inputs:amount/1e18 as staked_amount, event_inputs:sender::string as wallet from ethereum_core.fact_event_logs where contract_address = lower('0xae7ab96520de3a18e5e111b5eaab095312d7fe84') and event_name = 'Submitted' and event_removed = false ), lido_daily as ( SELECT date, count(tx_hash) as inflow_txns, sum(staked_amount) as total_inflow_eth, avg(staked_amount) as avg_inflow_eth, count(distinct wallet) as inflow_wallets FROM lido_stakers GROUP BY date ) SELECT 'Lido' as app, date, inflow_txns, total_inflow_eth, avg_inflow_eth, inflow_wallets FROM lido_daily UNION SELECT 'RocketPool' as app, date, inflow_txns, total_inflow_eth, avg_inflow_eth, inflow_wallets from rp_results ------------------- 2. with lido_stakers as ( SELECT block_timestamp, to_date(block_timestamp) as date, tx_hash, event_inputs:amount/1e18 as staked_amount, event_inputs:sender::string as wallet from ethereum_core.fact_event_logs where contract_address = lower('0xae7ab96520de3a18e5e111b5eaab095312d7fe84') -- AND block_timestamp > CURRENT_DATE - 7 and event_name = 'Submitted' and event_removed = false ), top_stakers as ( SELECT wallet, sum(staked_amount) as staked_eth FROM lido_stakers GROUP BY wallet ORDER BY staked_eth DESC LIMIT 10 ) SELECT date, NVL(address_name, wallet) as staker, sum(staked_amount) as staked_eth FROM lido_stakers LEFT JOIN ethereum_core.dim_labels ON address = wallet where wallet IN (SELECT wallet from top_stakers) GROUP BY 1,2