Introduction

What is Lido? It's one of Top 3 Names you hear these days responsible for the bloody market we are in... Well, not exactly responsible, but they provide a product (stETH) that is now the main selling pressure on the whole market.

stETH is staked ETH. You stake your ETH with Lido finance and get stETH on a 1:1 scale. Beside from the yield and reward that is gained by stETH, you are entitled to redeem one ETH for each stETH you hold after beacon chain merge successfully occurring. Now, the problem is that there were some institutions and protocols utilizing stETH as collateral or other purposes; Now that the market is in blood, they are selling their stETH to save their other positions and this led to De-Pegging of stETH/ETH price.

Methodology

We have been investigating different aspects to this product and this situation lately on flipsidecrypto. Today it's turn to take a look at the gain and loss that people had for the past 3 months just resulting from De-Pegging. We are doing this first by some accumulating metrics showing total stats and then by each address gain or lose.

Data & Analysis

The thing about our case is that you have 2 major factor in effect: Peg & Slippage

While peg is dependent on US Dollar price of assets, Slippage is calculated by the amount of assets in use inside pools. In times of high tension market specially in a selling pressure, these both can happen and amplify each other's effects.

We started with De-Peg effect. Chart below shows that users who are Staking ETH with lido, how much they are gaining or losing in dollars on a daily basis? The thing is right now, Staking ETH with Lido equals to get a 1:1 stETH with lower dollar value.

The real difference began to show itself on May 8th after terra collapse and kept rising there after. You should notice that it's average price and the difference can be larger or lower in specific cases.

Slippage Effect

This is more complicated. De-Peg comes from the simple rule that market needs to decide what an asset worth. But slippage is about the amount of liquidity actually existing in a given pool for that asset. In our case, We are searching through ETH/stETH Curve pool. If the amount of ETH be more than amount of stETH, you will encounter to a slippage effect where you get less or more than what you wanted.

In our case, when selling pressure of stETH commenced and continued, the curve pool lost it's balance significantly (I pointed and demonstrated this imbalance here: ).

The result is that users are able to gain more or lose more during each trade. some people are using this deliberately in person or utilizing bots to generate profit.

Chart below shows that how recent selling pressure and Mac crash had the most effect on the slippage. Curve pool lost its balance and now users are able to get more stETH by swapping less ETH in the hope of the time when merge comes and they will be able to redeem their stETH for ETH.

Numbers seems a bit problematic and I'm still working on it.

Our final data set is a table of all the addresses that staked ETH with Lido, have also Swapped ETH for stETH in Curve pool, and what i hope to be their gain or loss (again, Im skeptical about the numbers and working on it).

If the numbers are true, some of these can be bot addresses that are constantly selling stETH for more ETH, staking acquired ETH again with Lido, and vice versa, to generate maximum profit. Also some are reqular users taking advantage of the situation.

Negative numbers are essentially showing users that take out more stETH with less ETH. So you can say that most people are experiencing a loss somehow, those how are profiting from this slippage/depeg situation are less but getting much higher profits.