The crypto market has witnessed a turbulent few weeks after the FTX collapse but Lido Finance, a liquid staking protocol, has been a bright spot amidst the chaos. According to Data from DeFiLlama, Lido protocol has earned $1 million or more in fees daily since October 26. 

Let’s analyze the on-chain fundamentals to see why this trend has continued.

What’s behind Lido Finance’s growth?

Lido’s growth started in May 2021, pre-FTX collapse. The fees reached an all-time high on Nov. 10 as fee revenue nearly topped $2.6 million. The protocol earns 10% of the total Ethereum (ETH) staking rewards generated from user deposits.

Data also shows a steady increase in deposits to Ethereum’s PoS consensus translates to an uptick in Lido’s fee capture.

Lido fundamentals shine even as the wider crypto market struggles to regain traction
Lido total deposits. Source: Dune Analytics

Lido’s fee revenue moves in tandem with Ethereum Proof-of-stake (PoS) earnings since Lido sends received Ether to the staking protocol. After the FTX collapse, Ethereum activity has grown thanks to an uptick in decentralized exchange (DEX) activity. Ethereum fees and revenue also reached a 30-day peak on Nov. 8, posting $9.1 million in fees and $7.3 million in revenue.

Lido fundamentals shine even as the wider crypto market struggles to regain traction
Ethereum fees and revenue. Source: Token Terminal

New and daily active users keep increasing

Unique depositors into the Lido protocol have reached 150,000, demonstrating that Lido is continuing to attract new users. The increase in unique deposits comes after centralized “earn” programs have shown weaknesses due to exposure to their exposure to FTX, Genesis, BlockFi and others.

Lido fundamentals shine even as the wider crypto market struggles to regain traction
Lido unique deposits. Source: Dune Analytics

Daily active users and Lido (LDO) token holders are also increasing on Lido. According to data from Token Terminal, daily active users hit a 90-day high of 837 on Nov. 17 further bolstering the platform’s positive momentum.

Lido fundamentals shine even as the wider crypto market struggles to regain traction
Lido tokenholders and daily active users. Source: Token Terminal

Related: DeFi platforms see profits amid FTX collapse and CEX exodus

Lido’s market capitalization does not match its on-chain fundamentals

While fees, deposits and revenue continue to increase for Lido, the market cap of LDO tokens is not keeping pace.

As mentioned above, Lido hit a record amount of fees on Nov. 10, at the same time the market cap decreased from $1.2 billion to $663.7 million.

According to Coingecko, during this same period, the price of LDO tokens dropped from $1.80 to a low of $0.90.

Lido fundamentals shine even as the wider crypto market struggles to regain traction
Lido’s circulating market cap and fees. Source: Token Terminal

Despite the market-wide downturn, Lido is showing strong fundamentals on multiple fronts. The steady uptick in DAUs, revenue and new unique participants are all key components for assessing growth and sustainability within a DeFi platform.

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