Lido’s price performance was depressing in second half of 2022, and even earliest investors see risk in holding token
The price performance of Lido Finance’s token on the market has made LDO the least desirable financial instrument for any type of investors, as it slowly lost its value in November and December. Latest informative post from lookonchain Can explain the behavior of assets on the market.
Selling pressure
According to the on-chain data, one of the earliest investors of Lido Finance sold almost $700,000 worth of LDO less than 24 hours ago, which could have been the main fuel for the most recent 8% price drop.
At this point, Stani Kulchov sold all 2 million LDOs allocated on December 17, 2020, at $1.2 per token, making a profit of over $2 million. Unfortunately, the success of a seed investor is a devastating loss for retail holders.
Problems with Lido
Since August 2022, LDO has been moving in a severe downtrend, losing more than 70% of its value in 2022. The only period in which Lido has been showing above average performance was the pre-Merge market era, when the DAO was one of the most popular ways of gaining liquidity with the staked Ethereum.
Following the launch of Ethereum staking, Lido Finance faced a lot of pressure as investors raised questions about the business model used by the project. In exchange for the staked Ethereum, Lido offers investors a token, which is essentially a liquid representation of their locked-in assets. Considering the centralized nature of token issuance, decentralizing the entire Ethereum staking venture poses some risks that could become a problem in the future.
