Impressive Lending Pool Growth at Lido Finance
The MakerDAO [MKR] and Aave’s [AAVE] loan pools on its protocol have grown significantly, according to a recent tweet from Lido Finance [LDO] on February 6. MakerDAO’s steCRV surged by a whopping 636% over the last week, while Aave’s Wrapped stETH [wstETH] witnessed a spike of 140%.
Motives for the Growth
The rising amount of ETH staked on the Lido beacon chain is one of several factors contributing to this rise. In order to draw in more users, the site has also been providing a wide range of incentives and awards.
TVL is Increasing
According to Defi Llama, the Total Value Locked (TVL) for Lido increased by 3.83% over the previous seven days and was estimated to be $8.42 billion at press time.
Whale-attracting factor
Whales have been interested in this encouraging increase as well. Large investors appear to be interested in the expansion of the Lido protocol, according to data from Santiment that implies a rise in the percentage of LDO held by large addresses. Retail investors, however, may also be at risk since significant losses may arise from huge sell-offs by whale addresses.
Reduced Network Growth
Despite the amazing expansion of MakerDAO and Aave’s loan pools, the network growth of the LDO token has decreased, maybe as a result of a lack of demand from new addresses.
The Future of Decentralized Lending
Despite this, the rise of decentralized lending and borrowing services on the Lido protocol, such MakerDAO and Aave, is a good thing for the cryptocurrency community. Lido’s future and its capacity to prosper in the face of slowing network development are both up in the air.