The current increase in Lido APR could be a trigger that will also stimulate people's interest in Ethereum (ETH) and stETH.
Lido recently published a proposal with the aim to increase its APR; while this could be good news to investors already utilizing the liquidity staking protocol, it could also have an impact on the Ethereum network as some significant engagements have been witnessed from large addresses and validators on the Ethereum network.
As reported by Chinese reporter Colin Wu Blockchain, the proposal has been ‘’voted to pass, and the user staking reward update has resumed.’’ On November 13, Lido’s proposal to raise its APR from 10% to 17.5% propelled an increase of the Lido stETH APR to 10.2%.
Summary On Lido Finance
For context, Lido or Lido Finance is a widely used liquid staking protocol on the Ethereum Network, managing the vast majority of liquid staking derivatives within the Ethereum ecosystem. The solution was created to compete against centralized exchanges (CEX) and could be used within decentralized finance (DeFi) for lending, borrowing, and more.
The thriving growth of the protocol has so far been gathering concerns that it could have a significant impact on Ethereum’s decentralization. Some reports have it that with the birth of more protocols like Lido in the ecosystem, staking on Ethereum would become much more decentralized.
How Could Lido Increased APR Impact Ethereum
Notably, Lido has always had a part to play in the decentralized staking on Ethereum ever since the blockchain consensus mechanism transitioned to Proof of Stake (PoS). With that, the current increase in Lido APR could be a trigger that will also stimulate people’s interest in ETH and stETH. After all, a substantial APR of 17.5% is enough to attract just any investor who also has an interest in staking on Ethereum.
Did Ethereum Transaction Volume Experience a Massive Uptick
Glassnode, an on-chain intelligence market, in one of its report graphs, revealed that within the last 30 days, the number of validators on the Ethereum network grew by 4.95%, and in addition, the total revenue generated by them appreciated by 34.56% during the same period.
Not only validators but other Large investors holding at least 10 ETH on the Ethereum network witnessed a massive increase over the past 30 days, pushing Ethereum volume to a five-month ATH of $11,970 on 14 November.
A report from Santiment, another on-chain intelligence market, showed that while there was a spike in big addresses and the number of validators, the Ethereum velocity depreciated, and it could be a result of a transaction traffic decline. The Ethereum NFT ecosystem on Opensea also witnessed a low trading volume.
Overall, at the time of writing, ETH is currently trading at an average price of $1,261.56, up by 1.77% in the last 24 hours. In contrast, its volume has also appreciated by 36.27% during the same period, according to data from CoinMarketCap.