Lido V3 Activated: Will It Save LDO From Marauding Crypto Bears?

Lido v3 has been activated, releasing stVaults as DeFi receives an upgrade. Will this revive demand, lifting the LDO price to December 2024 highs?

Crypto markets are bleeding and fragile. Bitcoin, Ethereum, and Lido (LDO) have not been spared from the sell-off of the last trading day. When writing, the total crypto market cap is stable, recovering from below $3 trillion.

Yesterday’s losses could extend further, potentially wreaking havoc across the crypto and DeFi ecosystems if history leads. Typically, declining crypto prices negatively affect activity and DeFi total value locked (TVL), looking at trends in the last bear market of 2022.

DeFiLlama data shows that the TVL of all DeFi protocols stands at $101 billion, down by over $35 billion since mid-January when crypto prices began sliding. However, this doesn’t mean DeFi protocols and developers will stop building or releasing critical updates.

(Source)

Lido Releases V3

On February 20, Lido, the world’s largest DeFi protocol by TVL, released Lido V3. The launch is significant, marking a technological leap that could reshape Ethereum staking and attract more institutions.

The Lido V3 Early Adopters initiative is live.

Node Operators can now join Lido V3 EA and launch ETH pre-deposit vaults on Mellow + Symbiotic.

Once live, stVaults will serve as the foundational layer for pre-deposit vaults, driving the next generation of stETH-based products. pic.twitter.com/2ZmFwiRHhN

— Lido (@LidoFinance) February 20, 2025

The question remains: Will Lido V3 strengthen its position and slow the LDO sell-off?

Currently, Lido dominates the Ethereum liquid staking sector. Users can help secure the Ethereum proof-of-stake blockchain through this platform, earning a solid 4% APY.

Its success stems from its simplicity. Unlike traditional staking methods, Lido doesn’t lock stakers’ liquidity; instead, they receive stETH (staked ETH), which they can use for other activities like lending or liquidity provision.

This feature explains why Lido has grown into the largest DeFi platform, with a TVL exceeding $23 billion.

Lido V3 elevates these offerings. The upgrade introduces stVaults, a modular and customizable staking infrastructure.

Through stVaults, users can tailor their staking experience by selecting their preferred node operators, gaining access to adjustable fee structures, and optimizing risk-reward strategies—all without losing liquidity via stETH.

Will LDO Shake Off Weakness?

This flexibility could give Lido a competitive edge. Yet, amid the broader crypto market slump, it’s uncertain whether bulls will regain control and reverse yesterday’s losses.

At press time, LDO is trading at mid-November 2024 levels. In a bearish breakout, prices have fallen below a multi-month support level, and bears could push losses further today.

On a positive note, yesterday’s candlestick closed with a long lower wick, suggesting a possible rejection of lower prices. If LDO rises today, reclaiming $1.7 and reversing February 24 losses, bulls might resume the Q4 2024 uptrend.

(LDOUSDT)

Confidence in this outcome is growing, especially since LDO now has Grayscale’s backing, making it one of the best cryptos to buy.

In early December 2024, Grayscale—one of several issuers of spot Bitcoin and Ethereum ETFs—launched the Grayscale Lido DAO Trust.

This product allows institutions to gain exposure to LDO and, by extension, the Ethereum staking economy through a regulated vehicle.

The endorsement adds credibility and could support LDO prices in the long term. Given that spot ETFs for Ethereum and Bitcoin were Grayscale Trusts before their conversions, it might also pave the way for a spot LDO ETF.

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