Lido Finance Will Sell Tokens Worth $29 Million, Causing A 20% Drop In LDO.
According to the voting website on the decentralized governance platform, Lido Finance started voting for the “diversification” of an existing treasury to get ready for the down market.
In the vote that began 14 hours ago, there is a proposal to sell 2% of the total supply of LDO for $1.45. The investment will be led by the company Dragonfly, which will also buy 10 million tokens. A buyer will be granted full voting rights and immediate unlocking of the purchased amount.
The voting website claims that the price of $1.45 per LDO token is “appropriate” and can encourage users to join the Lido decentralized autonomous organization.
The money raised from the sale gives the DAO a “runway” and a cushion to stave off early selling pressure. But even as they make the course for sale, the course’s creators are aware of how much it depends on the market.
Even though the deal was OTC and had a specified sale structure, some LDO holders weren’t too thrilled with the current plan and sold their tokens on the market, escalating the 20% fall we’ve seen since yesterday.
Considering Lido Finance’s involvement in the Ethereum 2.0 staking contract, the Ethereum Merge upgrade is the primary driver of the recent LDO rise. The LDO token had a significant uptrend once the update’s release date was made public, giving its owners a recent gain of about 200%.
As was to be expected, the token experienced a severe overbought condition and a brief slump that was sparked by the aforementioned sale request. The cryptocurrency would have seen intense selling pressure if the transaction had been forced through exchanges because the sale amount represents 25% of LDO’s daily volume.
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