With the ETH 2.0 Merge being the much awaited event in the crypto space, Ethereum users are preparing to make their transition from Proof of Work (PoW) to Proof of Stake (PoS). Hence, LIDO finance has set out to solve two primary problems with ETH 2.0 staking:

• Minimum requirement of 32ETH
• Illiquid funds

How does LIDO work ?

When users stake with Lido, they receive stETH tokens on a 1:1 basis representing their staked ETH. stETH balances can be used like regular ETH in the DeFi space to earn yields and lending rewards. These balances are updated on a daily basis to reflect your ETH staking rewards. Another great advantage when staking with LIDO is that there are no lock-ups or minimum deposits. When using Lido, users receive secure staking rewards in real-time, allowing for participation in the securing of Ethereum without the associated risks and downside potential.

Note: LIDO staking app also supports 10+ L1 networks apart from Ethereum.

Introduction to LIDO Finance

Since it's launch LIDO has accumulated a significant interest in terms of number of users and the capital from the ETH stakers as seen in the above figures. This is a testament to its initial success.

Below we see some daily stats of LIDO staking platform in the last 3 months

Inferences

• Daily Volume reached a high of $165M on May 12th, 2022. With average stake size also reaching high levels of $13M.

• This corresponds to the $LUNA Crash date.

• The daily average stake size has been quite variable, on most days it is well below $2M each day, however on some days we see the average stake size going as high as $17.8M as seen on May 9th, 2022 - This is the same day $UST lost it's peg and $LUNA went into a death spiral to zero that week.

• There was an inflow of ETH stakers with as much as 66 unique stakers on 12 May, 2022. The daily number of unique stakers since then has been in a downward trend.

• Staking & Unstaking pattern pattern suggests that unstaking volume far outweighs staking volumes in the last 3 months. This confirms bearish sentiment in the market.

• Luna crash had an adverse impact on the crypto space. We can come to a conclusion that although LUNA is not directly linked to LIDO or ETH, it has deeply affected the broader market sentiment.