Lido (LDO) is introducing it to the strategic financial infrastructure layer as a key beneficiary of Ethereum’s continued growth.
Lido is the dominant ETH staking protocol. It features a decentralized autonomous organization (DAO) that allows users to maintain full control of their pile tokens while receiving daily rewards for betting ether.
Lido is positioned as the profit engine behind Ethereum’s rise
Participants in the crypto market are in favor of the idea that infrastructure staking will go beyond technical plumbing to become a profit engine.
Due to the surge in institutional and ecological interest in ETH, some analysts now argue that Lido’s native token LDO could be significantly underestimated.
Milk Road co-owner Kyle Reidhead recently highlighted a collection of bullish catalysts that have formed around Ethereum. Crypto’s executives pointed to Ethereum’s successful Layer 2 (L2) roadmap, recruitment by major companies such as Robinhood and OKX, and growth trends in ETH used by the Ministry of Corporate Treasury.
“ETH is setting it up to really work here. I’m very bullish about ETH,” he said.
Reidhead cited the involvement of the Ethereum Foundation (EF) and the upcoming arrival of ETFs that will further accelerate ETH.
This trend could be translated directly into the ultimate benefit of the lido. Lido controls about 60% of the ETH on all piles.
Milk Road analyst M0XT explained that Lido’s revenue model will expand to ETH itself.
“Bulk about ETH? You should be bullish about LDO too,” he wrote.
This attitude is based on Lido earning profits on ETH and sharing about 50% of its revenues to validators. Based on this, rising ETH prices will increase Lido’s profit margins without increasing the corresponding operating costs.
“But here is the kicker. Not all costs go up at ETH,” continued M0XT.
Over the past three years, Lido’s liquidity costs averaged $13.5 million per year. Meanwhile, operating expenses were around $40 million.
Assuming they are flat or conservatively bumping into $50 million, Lido could generate profits for tens of millions of people purely from the rising price of Ethereum.
With 90% of LDO’s token supply already in circulation and its current market capitalization is $644 million, LDOs may be misprived compared to their cash flow potential.
As ETH demand accelerates, investors’ interest in LDOs grows
Investor sentiment is beginning to change along this paper. Crypto Trader Kcryptoyt highlighted Lido’s dominant market share in the ETH staking ecosystem.
Traders have acknowledged some skepticism about long-term “price switching.” He also admits that LDOs look like an attractive purchase.
“I’m not pulling the purchase trigger.
Meanwhile, the broader market background only strengthens the case. Ethereum is beginning to resemble the “reserve assets” of the crypto economy, reflecting the role of Bitcoin in its facility portfolio, so Lido can benefit as the biggest gateway to ETH staking.
Ethereum Increased integration of businesses into Treasury, Defi infrastructure and ETF products Strengthening demand for ETH exposure, including harvest. Most of it flows through Lido.
While risk remains for protocol governance, regulatory scrutiny, or competitive staking models, analysts suggest that Lido’s position is independently entrenched.
As Ethereum approaches to book the status of an asset, LDOs may emerge as one of the most exploited ways to be exposed to that shift.
According to Coingecko data, the LDO was trading at $0.7197 last week.
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