Ethereum is being traded at discount, but there are some risks
Stacked Ethereum tokens by Lido Finance continue to be a popular instrument among Ethereum stackers who are willing to be more liquid on the market using tokens issued in relation to Stacked coins. During periods of high volatility, the price of STETH may drop below certain thresholds against ETH, which some investors use as an arbitrage opportunity.
According to market data, stETH has once again rolled at a discount against ETH, with its value reaching 0.97, which puts it at a 3% discount against the “real Ethereum.” Investors have not seen stETH at such a low level since UST’s implosion.
Meanwhile, Ethereum’s share on the stETH/ETH Curve pool has reached 69%, which could be a sign of the pair’s stabilization in the future. However, every arbitrage opportunity on the market brings with it significant risk for traders.
The decoupling of stETH is an unhealthy sign for every Lido DAO participant. The most likely reason behind the decoupling might be tied to the most recent dispute in the Ethereum validator community caused by yet another postponement in the staked ETH unlocking timeline.
At this point, it is unclear when users will be able to get their Ethereum back from locked contracts. While tokens like stETH add to the liquidity of staked Ethereum, the inability of users to manage their funds independently is a serious problem that could fuel massive selling pressure in the future.
Ethereum critics previously warned investors that unclear lock-up terms could cause an enormous spike in selling activities after investors get their ETH back, and no burning mechanism will prevent holders in a panic from potentially crashing the value of the second-biggest cryptocurrency on the market.
