What is Lido?

Lido is a platform to participate in staking pools, which is fully decentralized and open source. This means that you can go to their GitHub (Lidofinance) and give a look at the code. There are no hidden features, everything written inside the repository is what makes Lido work. This is good because it gives users the security that nothing is hidden and that the developer community always reviews and fixes any bugs that are found.

Also, Lido is a non-custodial platform, meaning that there is no centralized entity that controls the cryptocurrencies deposited in it. Everything is done through smart contracts, which are constantly reviewed and audited.

Finally, the characteristics and evolution of the protocol depend on the decisions of its community, made through its DAO. Lido sustains its operation thanks to two tokens, the LDO governance token and the ST tokens. We are going to explain their use and operation:

• LDO is the native token of the platform and its tokenomics depend on it. The token serves to support the voting and governance system of the protocol, two factors that affect the economic variables that the protocol applies to the staking pools it supports.

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• ST tokens are tokens derived from the tokens that are supported by the protocol. For example, the Ethereum pool receives the user's Ethereum tokens, the protocol locks those tokens and gives the user the same number of stETH tokens.

Key Findings

• The collapse of the UST stablecoin and Terra's LUNA governance token on May 2022 created panic in the crypto market, which affected Defi platforms like Lido.

  • Only 60.9k ETH were staked in the past 4 months compared to 4.16M staked since December 18th 2020 (the date Lido staking began).
  • The average stake size before May 11th was 42.8 ETH, while the average stake size after this date has been 2.3 ETH.
  • The highest ETH deposit before May 11th was 62k ETH, and after that day the max deposit has been of 5.19k ETH.

• The wallet with the largest deposit size is third in total ETH staked on Lido. The first and second wallets have a smaller deposit size but they have 2 and 9 times more deposits, respectively.

• The number of stakers over time hasn’t decreased much compared to the previous year. This can be seen on the cumulative unique users chart where its slope has been almost constant since August 2021. A similar trend is followed by the number of deposits.

• As the average stake size is 34.1 ETH, the average size of deposits above the median (0.904 ETH) is much higher (67.9 ETH).

• Most of the spikes both in swap volume and number of stake / unstake transactions usually happen after a shift in ETH’s price tendency.

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• The highest peak in ETH staked that happened on March 15th 2022, was mainly due to a wallet depositing a large amount of funds into Lido, as only 314 users staked on that day. More precisely, this wallet (0xcde35b62c27d70b279cf7d0aa1212ffa9e938cef) staked 160.08k ETH within 15 transactions.

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• Despite the amount of ETH staked going down since May 11th 2022, the number of stakers over time (213 users) hasn’t decreased that much compared to the previous year. This can be seen on the cumulative unique users on the left chart where its slope has been almost constant since August 2021.

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• There were 3 big peaks in the number of unique users: on August 14th 2021, February 11th 2022 and May 7th 2022. The second one was the ATH which reached 2506 unique users.

• There was an increase in the amount of ETH staked on Lido during 2021, specially from April to September. During the last months of 2021, the price of ETH reached ATH’s which consequently lowered the amount of ETH staked. Looking at the chart, the amount of ETH staked on Lido is usually inversely proportional to the price of ETH.

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• In the midst of the craziest week in crypto history, the collapse of the UST stablecoin and Terra's LUNA governance token became the biggest story in the crypto ecosystem. LUNA, previously a top 10 coin by market cap, fell 99.9999% at a fraction of a cent, and UST, designed to hold at $1, went down to less than a cent in a matter of days. This situation created a lot of panic in the crypto market and most cryptocurrencies crashed around a 30%-60%. Since then, there has been a lot of fear in the market (especially for wallets with large amounts of funds). This can be seen in the inmense decrease in staked ETH since May 11th 2022, where only 60.9k ETH have been staked in the last 4 months. A couple days prior to the LUNA/UST crash, on May 2nd 2022, the total ETH staked on that day (116.22k ETH) reached twice the amount staked during these past 4 months.

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• The highest staking volume dates to March 15th 2022, with a peak of 197.23k ETH.

• The deposits chart follows the same trend as the unique users chart. This is represented by the ratio of deposits per user, which is slightly above one (1.115 deposits / user).

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• Thus, the chart also has the same three peaks with the highest one being of 2765 deposits on February 11th 2022 .

• The number of deposits has also remained constant (which can be seen by the cumulative deposits representation in the chart), despite the decrease of staked ETH since May 2022.

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• In the daily lowest ETH deposits chart, March 30th 2021 had the highest value amongst all, of 0.5 ETH. This value was much higher than any other value in that chart because on that day only 10 deposits were made, and all of them were higher than the aforementioned value.

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• Despite the lowest stake size ever being 1x18^-18 ETH, that was a rare scenario, as the average size of the minimum daily deposits is 0.006 ETH.

• The highest deposit ever made was 62k ETH on August 28th 2021, from the wallet ‘0x9cf59ecde926cc1b5ff1cb9b247e0fec627091b1’ that staked 115.7k ETH over time (only 7 deposits were made and all happened on August 2021). Nevertheless, after May 11th we can see that the maximum deposit size was of only 5.19k ETH.

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• The aforementioned wallet is the third wallet that staked the most amount of ETH on Lido over time. The first one (0x10f37ceb965b477ba09d23ff725e0a0f1cdb83a5) staked 199.45k ETH within 64 transactions, while the second one (0xcde35b62c27d70b279cf7d0aa1212ffa9e938cef) staked 160.08k ETH within 15 transactions. As the third one staked only 7 times, the chart below shows that the average deposit size follows a descendent order: third, second and first wallet.

• The median provides a helpful measure of the centre of a dataset. In this case, we can see that on average since the date Lido staking began (December 18th 2020), the median stake size has been 0.904 ETH. This means that there are as many ETH deposits on Lido above and below this number.

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• The reason why the daily ETH staked has been lower since May 11th is because there have not been many big investors staking their ETH on Lido. This can be seen above where the average stake size before May 11th was 42.8 ETH, while the average stake size after this date is 2.3 ETH.

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• However, seeing that the average stake size is 34.1 ETH, we can confirm that the average size of deposits above the median is much higher (67.9 ETH).

• As we saw above in the daily deposits chart there were 3 big peaks in the number of stake transactions: on August 14th 2021, February 11th 2022 and May 7th 2022.

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• May 13th 2022 had the first spike of the year of unstake transactions with 534 of them.

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• This resulted in the highest peak of swap volume from stETH in 2022 with 143.68k stETH. This was caused by the LUNA / UST crash from the previous days, where people swapped their stETH into ETH and then into stablecoins to mitigate the crash of Ethereum’s native token.

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• June 13th to June 19th 2022 were the dates with the second highest stETH unstaked, with a peak of 135.41k stETH swapped on June 13th.

• Most of these spikes both in swap volume and number of stake / unstake transactions usually happened after a shift in ETH’s price tendency.

Conclusions

• The collapse of the UST stablecoin and Terra's LUNA governance token on May 2022 created panic in the crypto market, which affected Defi platforms like Lido.
  • Only 60.9k ETH were staked in the past 4 months compared to 4.16M staked since December 18th 2020 (the date Lido staking began).
  • The average stake size before May 11th was 42.8 ETH, while the average stake size after this date is 2.3 ETH.
  • The highest ETH deposit before May 11th was 62k ETH, and after that day the max deposit has been of 5.19k ETH.
• The wallet with the largest deposit size is third in total ETH staked on Lido. The first and second wallets have a smaller deposit size but they have 2 and 9 times more deposits, respectively.
• The number of stakers over time hasn’t decreased much compared to the previous year. This can be seen on the cumulative unique users where its slope has been almost constant since August 2021. A similar trend is followed by the number of deposits.
• As the average stake size is 34.1 ETH, the average size of deposits above the median (0.904 ETH) is much higher (67.9 ETH).
• Most of the spikes both in swap volume and number of stake / unstake transactions usually happen after a shift in ETH’s price tendency.

Methodology

The data used in this analysis was collected by combining the information on the fact_event_logs, ez_dex_swaps and ez_token_transfers tables of the core schema of the Ethereum database. The first table provided information about the stake transactions on Lido, which can be detected as deposits where:

1. A wallet has interacted with the stETH contract (0xae7ab96520de3a18e5e111b5eaab095312d7fe84) and send ETH to it.
2. After this, a ‘Submit’ event is emitted on the blockchain.

According to the Lido documentation, staked ETH (stETH) can’t be unstaked: “When withdrawals are enabled on the beacon chain, stETH can be redeemed for unstaked ETH and accumulated rewards. Unlike Beacon chain ETH, stETH can be freely transferred and traded“. The Ethereum Beacon chain is supposed to allow withdrawals after the Ethereum Merge is complete. As this is soon to come but it hasn’t happened yet, in this dashboard we observe the amount of stETH that has been swapped out in order to simulate the unstaking of stETH, using the second table.

Finally, the third table is used to obtain the price of WETH, which replicates the price of ETH.