Ethereum

Here’s Lidos (stETH) Plan of Action to Avoid Crash!

Written by: Nidhi Kolhapur

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Nidhi Kolhapur

Nidhi is a Certified Digital Marketing Executive and Passionate crypto Journalist covering the world of alternative currencies. She shares the latest and trending news on Cryptocurrency and Blockchain.

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Jun 11, 2022

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In the previous 24 hours, the price of Ethereum, the second largest cryptocurrency, has plummeted by 8%, with Lido’s staked ETH (stETH) token price following suit and causing panic in the cryptocurrency market.

Lido has proposed a change to its governance process, based on LDO + stETH. The plan aims to keep the protocol’s governance to a minimum. It focuses on the dangers that can be mitigated by aligning DAO and stakeholder incentives.

stETH is a derivative token backed by the value of Ethereum at 1:1. However, there is a pricing difference between ETH and stacked Ethereum. The second most valuable cryptocurrency is now trading at an average price of $1529.

Ethereum is now priced at $1468 per stake. Lido’s token has crashed for the second time this month, according to the report. The risk of staking derivatives’ liquidity has increased as a result of its demise.

What is the worst-case scenario?

The worst-case situation, according to Lido’s idea, could be capturing governance, which would cause the stakeholder to react. It will also have an impact on the Ethereum network. The DAO and team do not have direct authority over the validators, according to the proposal.

They have control over stETH upgrade, and Lido can upgrade the derivative contract, according to the protocol. It will enable for the burning and minting of staked Ethereum on any address. It means that DAO has no control over Ethereum’s stETH building. Users’ funds may be taken as a result of this.

The decrease of stETH, on the other hand, is caused by its sale on the secondary market. This selling has been exploited by Ethereum whales. The largest Ethereum wallets, according to Whalestate, have added more than $28 million worth of stacked Ethereum in the previous 24 hours.

The whales have contributed over 18.8k to the total. The largest sale was estimated to be worth roughly $7.9 million. Meanwhile, a whale purchased nearly $1.1 million in wrapped ETH.

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Nidhi Kolhapur

Nidhi is a Certified Digital Marketing Executive and Passionate crypto Journalist covering the world of alternative currencies. She shares the latest and trending news on Cryptocurrency and Blockchain.

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