Lido is a DeFi program that allows ether (ETH) holders to set aside tokens for transaction validation while also receiving yield. According to the Goldman Sachs, investors receive a staked ether token (stETH) at a 1:1 ratio and can use it as lending collateral or across supported trading pools.
The UST drop impacted stETH, which is now trading at a 4.5% discount to ETH, according to Goldman. This is due to the ability of stETH holders to change their tokens into bonded ether (bETH) and earn incentives on Terra’s Anchor Protocol. As a result, according to the research, stETH was prone to Terra blockchain halts, which impacted withdrawals.
This event is significant because Lido holds one-third of all staked ether and demonstrates how “DeFi’s composability can theoretically increase systemic risk,” according to the bank.
DeFi is an umbrella term covering lending, trading, and other financial operations that take place on a blockchain without the use of traditional middlemen.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Join CoinCu Telegram to keep track of news: https://t.me/coincunews
Follow CoinCu Youtube Channel | Follow CoinCu Facebook page
Patrick
CoinCu News
A Curve Finance scam app resurfaced on Apple's App Store for the third time, continuing…
Zurich, Switzerland, 7th November 2024, Chainwire
Polygon and Magic Labs team up to launch Newton, a cross-chain network designed for smooth…
2017 saw the cryptocurrency community record mouthwatering profits as several cryptos made remarkable gains. XRP…
Crypto advocates are optimistic about the approval of alternative cryptocurrency ETFs following Donald Trump victory.
Binance founder CZ, while barred from leading the exchange due to a DOJ plea deal,…
This website uses cookies.