[Lido] ETH Staked (June 2022)

    -- Date: 15 June 2022 -- Author: mar1na (catscatscode) -- Lido Q9. What is the total amount of ETH that has been staked with Lido? Show the daily amount of ETH staked with Lido in the past 3 months. Are there any trends you can see?

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    Introduction

    Lido Ethereum Liquid Staking Protocol allows users to deposit any amount of ETH to Lido and have it pooled and staked with Lido-approved nodes on Ethereum 2.0's Beacon chain. In addition to receiving 90% of the staking rewards (barring risks such as validator node slashing), the staking users get stETH token in the amount 1:1 to the ETH they deposit.

    stETH is a derivative token which allows users to retain access to liquidity they can use on DeFi, such as swapping and depositing to LPs, while their ETH is locked up. The intention is to enable a more liquid form of staking ETH, as well as lower the barrier for the minimum amount staked (from 32 ETH minimum that's required to stake directly on the Beacon chain) to encourage decentralization as per the core principle of blockchain.

    Methodology

    Whenever ETH is staked on Lido, equivalent stETH tokens are minted. This analysis identifies the amount of staked ETH as the ETH equivalent amount of stETH token minted (token contract address 0xae7ab96520de3a18e5e111b5eaab095312d7fe84).

    The analysis timeframe is the. last 3 months: 15 March - 15 June 2022. For part of the analysis, we also look at all-time staked ETH on Lido (since late 2020 when the Beacon chain started and enabled staked Ether).

    Data Results

    The popularity of staking ETH on Lido has generally been decreasing in the last 3 months, as the below chart illustrates. The last day when daily staked ETH was over 10k was May 11, when Terra's UST began its drastic depeg. This prompted a noticeable crisis of user confidence in stETH - although it is not technically a pegged currency and can settle into a market price after minting, is often viewed by users as one. The threat of a "depeg" was enough to disincentivize large volumes away from Lido-staked ETH stETH:

    Overall, however, more than 4M ETH has been staked on Lido to date. See the chart below, followed by the CoinGecko circulating supply calculation, which gives a similar result (4.22M vs. 4.14M according to Flipside data, which could be attributed to dataset discrepancies):

    Source: CoinGecko.

    Moreover, almost half (nearly 1.9M of over 4M) of all Lido staked ETH was staked in the past 3 months. This indicates that staking ETH was happening at high volumes until the pat month's crash:

    Takeaways

    Of all ETH staked on Lido, almost half was deposited in the last 3 months. It was a successful staking program, which took a hit after Terra collapse from May 11, 2022 onwards, as the ETH:stETH relationship was perceived to be a similar instance of vulnerable 'peg' despite core mechanism differences. Current daily ETH staking on Lido has fallen over 1,000x compared to the high from 3 months ago (181 ETH on 14 June vs 197k ETH on 15 March).

    About

    This analysis was created by catscatscode (Flipside, Twitter, catscatscode#3578 on Discord) on 15 June 2022 for Flipside Crypto's "ETH Staked" Lido bounty.