Lido's Staking Growth Falls Short of Revenue Expectations
Lido's staking growth may be impressive, but it's not translating into significant revenue for its LDO token holders. According to the protocol's first-half report, Lido captured just 5.7% of Ethereum's net staking growth in the first half of this year.
Despite adding 386,000 ETH over the period, reaching a total of 9.13 million ETH at June 30, Lido's market share fell from 23.93% to 21.18%. The report attributes much of this dilution to institutional capital entering other routes.
Lido's automated buyback mechanism, NEST, also faced challenges. At the start of September, it recorded a negative cumulative budget of about $517,024, which resulted in a skipped allocation.
The protocol's institutional offering includes a fee waiver that favors adoption over immediate income, and the dollar price of ETH and rewards earned on each staked coin also affect the outcome.