Decentral Block Post

The crypto market has witnessed a turbulent few weeks after the FTX collapse but Lido Finance, a liquid staking protocol, has been a bright spot amidst the chaos. According to Data from DeFiLlama, Lido protocol has earned $1 million or more in fees daily since October 26. 

Let’s analyze the on-chain fundamentals to see why this trend has continued.

What’s behind Lido Finance’s growth?

Lido’s growth started in May 2021, pre-FTX collapse. The fees reached an all-time high on Nov. 10 as fee revenue nearly topped $2.6 million. The protocol earns 10% of the total Ethereum (ETH) staking rewards generated from user deposits.

Data also shows a steady increase in deposits to Ethereum’s PoS consensus translates to an uptick in Lido’s fee capture.

Lido’s fee revenue moves in tandem with Ethereum Proof-of-stake (PoS) earnings since Lido sends received Ether to the staking protocol. After the FTX collapse, Ethereum activity has grown thanks to an uptick in decentralized exchange (DEX) activity. Ethereum fees and revenue also reached a 30-day peak on Nov. 8, posting $9.1 million in fees and $7.3 million in revenue.

Continued selling in the cryptocurrency markets pulled the total market capitalization below $800 billion on Nov. 21. Traders are increasingly nervous about the extent of damage FTX’s collapse may have on several crypto firms. Until the uncertainty clears, it is futile to expect a sustained recovery in cryptocurrency prices.

The FTX saga has broken the close correlation between the United States equities markets and Bitcoin (BTC). While Bitcoin is trading close to its 52-week low, the S&P 500 (SPX) has recovered sharply from its low made on Oct. 13.

The U.S. dollar index (DXY) is usually inversely correlated to Bitcoin but its recent drop from the multi-year high did not benefit Bitcoin. This suggests that crypto buyers remain on the sidelines and are not venturing in to buy.

However, Billionaire investor and hedge fund manager Bill Ackman said in a Twitter thread on Nov. 20 that crypto was “here to stay with proper oversight and regulation.”He also highlighted the potential of cryptocurrencies to “greatly benefit society and grow the global economy.”

Could the cryptocurrency market catch up with the U.S. stock markets? Let’s study the charts of the S&P 500 index, the U.S. dollar index (DXY) and the major cryptocurrencies to find out.

Bitcoin (BTC) held steady at the Nov. 21 Wall Street open following a weekly close at levels not seen since late 2020.

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD hovering above $16,000 after dipping below the level overnight.

Sentiment remained on a knife edge as rumors over crypto business conglomerate, Digital Currency Group (DCG) continued to swirl.

Concerns focused on the $10.5 billion investment vehicle, the Grayscale Bitcoin Trust (GBTC), with unsubstantiated talk of possible liquidity problems surfacing across social media.

Coinbase, the GBTC custodian, reportedly confirmed its Bitcoin holdings — over 635,000 BTC — were safe and present on the day.

Serum, a "decentralized exchange" on the Solana blockchain, has performed exceptionally well in terms of its SRM token price, despite it ties to the defunct FTX exchange.

SRM price up 140% in one week

On the daily chart, the SRM/USD pair has gained 140% in the last seven days, hitting $0.319 on Nov. 21 versus $0.177 on Nov. 14.

This pushed the circulating market cap to about $73 million and "fully diluted market cap," the market cap if the maximum supply was in circulation, to nearly $2.8 billion.

"Closer to zero"

SRM price rallied despite the ongoing delisting of Serum trading pairs across major cryptocurrency exchanges, including Binance, OKEx, Gate.io, and Phemex, thus raising fears about an ongoing "exit pump."

Exit pumps are when large investors pump the token's price in a low-liquidity environment to attract new buyers, only to then dump their entire holdings on amateur investors as witnessed with numerous pump-and-dump schemes.

Serum, a "decentralized exchange" on the Solana blockchain, has performed exceptionally well in terms of its SRM token price, despite it ties to the defunct FTX exchange.

SRM price up 140% in one week

On the daily chart, the SRM/USD pair has gained 140% in the last seven days, hitting $0.319 on Nov. 21 versus $0.177 on Nov. 14.

This pushed the circulating market cap to about $73 million and "fully diluted market cap," the market cap if the maximum supply was in circulation, to nearly $2.8 billion.

"Closer to zero"

SRM price rallied despite the ongoing delisting of Serum trading pairs across major cryptocurrency exchanges, including Binance, OKEx, Gate.io, and Phemex, thus raising fears about an ongoing "exit pump."

Exit pumps are when large investors pump the token's price in a low-liquidity environment to attract new buyers, only to then dump their entire holdings on amateur investors as witnessed with numerous pump-and-dump schemes.

Bitcoin (BTC) starts a new week still replaying November 2020 after its lowest weekly close in two years.

The largest cryptocurrency, just like the rest of the crypto industry, remains highly susceptible to downside risk as it continues to deal with the fallout from the implosion of exchange FTX.

Contagion is the world on everyone’s lips as November grinds on — just like the Terra LUNA collapse earlier this year, fears are that new victims of FTX’s giant liquidity vortex will continue to surface.

The stakes are decidedly high — the initial shock may be over, but the consequences are only just beginning to surface.

These include issues beyond just financial losses, as lawmakers attempt to grapple with FTX and place renewed emphasis on urgent Bitcoin and crypto regulation.