In today's rapidly developing blockchain ecosystem, the pledge rate of Ethereum (ETH) has exceeded the 20% level and continues to maintain good growth momentum. As an important part of Ethereum 2.0, Lido (LDO) and RocketPool (RPL), as the main liquid pledge protocols (LSD), have attracted much attention in their performance in the secondary market. This article will analyze the impact of the two token prices from the perspective of capital flow and provide reference for investment strategies of different periods.
Lido (LDO) Token Allocation and Market Selling Pressure
Lido’s total issuance is 1 billion tokens, with approximately 879 million currently in circulation. The distribution of tokens is more complicated, with 40.2% belonging to the team and validators, 34.6% belonging to investors, and 25.2% belonging to the treasury. Based on the latest statistics from Tokenunlocks, these data may change with market fluctuations.
Unlocking and selling pressure: Lido’s token unlocking situation is an important factor that investors need to pay attention to. The next large unlock will take place on August 26, 2023, involving 8.5 million LDO tokens. The unlocking cost of these tokens is $2.43 each. Historically, Lido has gone through five rounds of financing, of which the cost of tokens in the first round of financing was extremely low, only $0.0085 per coin. This means that early investors may put selling pressure on the market.
Data shows that more than 90% of first-round investor addresses are continuing to sell their LDO tokens. As the unlocking process for these tokens begins in December 2021 and is expected to be completed in December 2022, the market is likely to continue to be affected by selling pressure for some time to come.
Market dynamics and price trends
Recently, due to the impact of the lawsuit between XRP and the SEC, the market's regulatory expectations for Ethereum staking have been lowered, which has caused the price of LDO to rise sharply along with other "security concept" tokens. However, primary market investor Certus One sold 4 million LDO tokens at a high price, causing the LDO price to fall by 16.3% in the short term. Therefore, when considering the price trend of LDO, investors need to pay close attention to market dynamics and fundamental factors to make wise investment decisions.
Supply and demand of RocketPool (RPL) tokens: The total supply of RPL tokens is 19.55 million, and the final supply will reach 18 million. Of the initial supply of RPL, 54% comes from private financing, 31% comes from public sales, and 15% belongs to the team. The public sale of RPL was completed as early as January 2018 and has experienced multiple rounds of market fluctuations.
Inflation and market demand
The inflation situation of RPL token is a focus of investors. Since October 2021, RPL tokens have continued to be issued at a rate of 73,302 additional tokens every 28 days, with an annual increase of 5%. Eventually, the total supply of RPL will reach 30 million. It is worth noting that the inflation portion of the RPL token will be allocated to different entities, which may affect the supply and demand relationship in the market.
Currently, RPL’s pledge ratio is 46.97% and continues to rise. Node operators need to pledge RPL to obtain inflation. This mechanism provides value support for RPL tokens. As the amount of ETH pledged on the platform increases, the price of RPL may be strongly supported. Therefore, investors need to pay close attention to the platform’s staking activity and ETH price fluctuations to better understand the price trend of the RPL token.
Actual circulation and market performance
According to data, since October 2021, although the inflation target of RPL tokens is 1.55 million, 9.18 million tokens have actually been staked. This means that although the RPL token is inflating, the amount of RPL actually circulating in the market is decreasing due to the large amount of staking. This situation may provide some support to the price of the RPL token.
Without observing a restart of RPL protocol business, market demand for RPL will continue to exceed the inflation of the token. This provides investors with a good market opportunity, and it is recommended to focus on the operations and business development of the RPL protocol to better understand its future market performance.
in conclusion
To sum up, Lido (LDO) and RocketPool (RPL), as important participants in the Ethereum 2.0 liquid staking protocol, face different challenges and opportunities in the market for their respective tokens. LDO's selling pressure and RPL's inflation model require investors to pay close attention. Through in-depth analysis of market dynamics, investors can formulate more informed investment strategies to deal with possible future market fluctuations.
When making investment decisions, it is recommended that investors combine market fundamentals, capital flow conditions, and the supply and demand relationship of various tokens to obtain a more comprehensive market perspective. I hope this article can provide you with valuable reference in your investment decisions in Lido and RocketPool.