An independent media at the service of its community.
Our journalists have been covering Web3 and cryptocurrency news since 2016.
Join the +20,000 readers of The Big Whale
Smart crypto investment
Access the best crypto decryption to make the right investment decisions. 100% independent.
What you get when you subscribe
Wednesday's investment newsletter
Access to 1500+ decrypted tokens in The Ocean
Access to the Community Discord and our partners
To your credit, you have better information than the others. Your contribution to the community is remarkable.
Cryptos that make the news, every week
The world of cryptocurrencies is changing dramatically.
Our journalists have been covering the crypto industry since 2017 and bring you the essential news every week.
Our journalists have been covering the crypto industry since 2017 and bring you the essential news every week.
Subscribe
The first month is free. No commitment.
Cryptos that make the news, every week
The world of cryptocurrencies is changing dramatically.
Our journalists have been covering the crypto industry since 2017 and bring you the essential news every week.
Our journalists have been covering the crypto industry since 2017 and bring you the essential news every week.
Sent on January 31, 2024
👉
Manta Network - MANTA +46
This performance can be explained by the very recent launch of the Manta Pacific blockchain, which is a Layer 2 EVM based on Celestia and aimed at attracting applications based on Zero Knowledge Proof (ZKP) technology. The project therefore combines several powerful narratives and enjoys a certain hype.
👉
SUI - SUI +35
After Solana's explosive comeback at the end of 2023, high-performance Layer 1 blockchains gained in popularity. Moreover, Sui's on-chain activity has been rising steadily since the beginning of 2024. After a difficult launch in 2023, many indicators seem to have turned green for this token.
👉
Mantle - MNT -12% discount
The Layer 2 governance token linked to the BitDAO exchange is experiencing a fall, which could be explained by the strong competition between these Ethereum scalability solutions, especially with the arrival of new projects attracting investors.
👉
Ordinals - ORDI -6.74
The token linked to ordinal registrations on Bitcoin exploded upwards in 2023. The token is highly volatile due to its limited usefulness and mostly reflects the fluctuating hype around ordinals, the NFTs of the Bitcoin ecosystem.
Focus on tokens that matter
Every week, we decipher the token of the week and give you all the keys you need to make an investment decision.
Definition, use case, roadmap, tokenomics, we help you form an opinion on the hot topics.
Definition, use case, roadmap, tokenomics, we help you form an opinion on the hot topics.
Subscribe
The first month is free. No commitment.
Lido Finance - LDO
Sent on 31.01.2024 to our insider subscribers
Editorial opinion
The LDO token is clearly one of the assets to watch, as Lido is currently the best positioned project in liquid staking, a fast-growing activity.
It is the protocol that is capturing the most value in decentralized finance (DeFi), and is already profitable.
Lido has attracted capital from highly prestigious funds such as Andreessen Horowitz (a16z) and Paradigm.
Nevertheless, the LDO token does not allow you to benefit from the returns generated by the protocol. Its price is therefore based more on the overall attractiveness of the project than on the usefulness of the token.
Lido could come under particular scrutiny from regulators, who are increasingly interested in staking.
It is the protocol that is capturing the most value in decentralized finance (DeFi), and is already profitable.
Lido has attracted capital from highly prestigious funds such as Andreessen Horowitz (a16z) and Paradigm.
Nevertheless, the LDO token does not allow you to benefit from the returns generated by the protocol. Its price is therefore based more on the overall attractiveness of the project than on the usefulness of the token.
Lido could come under particular scrutiny from regulators, who are increasingly interested in staking.
Financing
Lido has raised $143 million in two rounds of financing.
The first ($73 million) took place in May 2021, with the Paradigm fund in the lead, along with Coinbase Ventures, DragonFly Capital and Delphi Digital.
The second took place in May 2022 with the entry of the giant Andreessen Horowitz fund (a16z), which invested $70 million on its own.
With the vesting period ending in August 2023, all LDO tokens have already been distributed to investors andteam. There is therefore no longer any need to fear a simultaneous mass sale of large historical portfolios.
Since May 2023, Lido has distinguished itself as one of the few profitable decentralized protocols. Fees collected outweigh cash expenses, generating more than $20 million in profits over the last 365 days.
Almost all cash is made up of tokens directly linked to the protocol (76% LDO and 23% stETH). In the event of a major market crash, the cash position would be exposed to a sharp fall in value.
The emergence of the re-staking trend, driven by the EigenLayer project, seems to bring new financial perspectives to liquid staking protocols, and Lido in particular.
The first ($73 million) took place in May 2021, with the Paradigm fund in the lead, along with Coinbase Ventures, DragonFly Capital and Delphi Digital.
The second took place in May 2022 with the entry of the giant Andreessen Horowitz fund (a16z), which invested $70 million on its own.
With the vesting period ending in August 2023, all LDO tokens have already been distributed to investors andteam. There is therefore no longer any need to fear a simultaneous mass sale of large historical portfolios.
Since May 2023, Lido has distinguished itself as one of the few profitable decentralized protocols. Fees collected outweigh cash expenses, generating more than $20 million in profits over the last 365 days.
Almost all cash is made up of tokens directly linked to the protocol (76% LDO and 23% stETH). In the event of a major market crash, the cash position would be exposed to a sharp fall in value.
The emergence of the re-staking trend, driven by the EigenLayer project, seems to bring new financial perspectives to liquid staking protocols, and Lido in particular.
General presentation
Launched in 2020, Lido is the leading liquid staking protocol. This activity consists of depositing crypto-currencies (with no minimum threshold) to secure blockchains in exchange for returns (3% to 4% annually on Ethereum), while retaining the liquidity of assets normally immobilized.
When depositing ETH on Lido, the user receives the equivalent in stETH. The stETH balance in the user's wallet increases daily to reflect the return on staking.
stETH can be used in many other decentralized finance protocols and sold at a price similar to that of ETH.
Price parity between ETH and stETH is maintained because any stETH holder can exchange them for an equivalent quantity of ETH on the Lido protocol (subject to a delay of several days). In the event of a price divergence, there is an economic incentive to arbitrage between the two tokens to restore parity.
Lido currently dominates the liquid staking market. Its total locked-in value (TVL) stands at $21 billion, far ahead of its nearest competitor, Rocket Pool, which has a TVL of $2.8 billion.
Lido's TVL exceeds that of all other decentralized finance protocols, with Maker in second place ($8.2 billion). What's more, Lido accounts for a third of all staked ETH in total, playing a major role in Ethereum's governance and security.
When depositing ETH on Lido, the user receives the equivalent in stETH. The stETH balance in the user's wallet increases daily to reflect the return on staking.
stETH can be used in many other decentralized finance protocols and sold at a price similar to that of ETH.
Price parity between ETH and stETH is maintained because any stETH holder can exchange them for an equivalent quantity of ETH on the Lido protocol (subject to a delay of several days). In the event of a price divergence, there is an economic incentive to arbitrage between the two tokens to restore parity.
Lido currently dominates the liquid staking market. Its total locked-in value (TVL) stands at $21 billion, far ahead of its nearest competitor, Rocket Pool, which has a TVL of $2.8 billion.
Lido's TVL exceeds that of all other decentralized finance protocols, with Maker in second place ($8.2 billion). What's more, Lido accounts for a third of all staked ETH in total, playing a major role in Ethereum's governance and security.
The LDO token
The Lido protocol is governed by a decentralized autonomous organization (DAO), governed by the LDO token. There is a limited number of LDOs, set at 1 billion tokens. LDO owners can submit and vote on proposals for the operation of the protocol.
LDOs were initially distributed between the protocol treasury (36%), theteam project initiator (35%), investors (22%) and partner validators (6.5%). The LDOs in the treasury are mainly used through liquidity mining programs: they are distributed to stETH users in the various DeFi protocols in order to promote the use of stETH.
Currently, the treasury is made up of around $415 million (76% LDOs and 23% stETH) and is topped up by the 10% commission that the protocol takes from all user staking rewards (5% is paid back to validators). The remaining 90% is distributed to users.
LDOs were initially distributed between the protocol treasury (36%), theteam project initiator (35%), investors (22%) and partner validators (6.5%). The LDOs in the treasury are mainly used through liquidity mining programs: they are distributed to stETH users in the various DeFi protocols in order to promote the use of stETH.
Currently, the treasury is made up of around $415 million (76% LDOs and 23% stETH) and is topped up by the 10% commission that the protocol takes from all user staking rewards (5% is paid back to validators). The remaining 90% is distributed to users.
Team & community
Lido was created by Konstantin Lomashu, Vasiliy Shapovalov and Jordan Fish. The latter, better known on X under the pseudonym "Cobie" (over 700,000 followers), leftteam around 2021.
The first two are not at their first project together. They founded Cyber Fund in 2014, a structure that has invested in numerous crypto projects such as Solana and Celestia. In December 2023, Cyber Fund announced a project revival of sorts, including the launch of a $100 million venture capital fund dedicated to blockchain, robotics and AI. Generally speaking, Lido's founders communicate little about their role within the protocol. The lack of information about theteam founder and her current role in the project may make us wary, but it can also be seen as a positive point for the protocol's decentralization and autonomy. There are currently around 30 developers active on the protocol every month and an average of 3,300 users interacting with the smart contract every week.
Lido has a very large community: 165,000 followers on X and a Discord with 22,400 members, with a reactive team and almost a hundred messages a day.
The first two are not at their first project together. They founded Cyber Fund in 2014, a structure that has invested in numerous crypto projects such as Solana and Celestia. In December 2023, Cyber Fund announced a project revival of sorts, including the launch of a $100 million venture capital fund dedicated to blockchain, robotics and AI. Generally speaking, Lido's founders communicate little about their role within the protocol. The lack of information about theteam founder and her current role in the project may make us wary, but it can also be seen as a positive point for the protocol's decentralization and autonomy. There are currently around 30 developers active on the protocol every month and an average of 3,300 users interacting with the smart contract every week.
Lido has a very large community: 165,000 followers on X and a Discord with 22,400 members, with a reactive team and almost a hundred messages a day.
Regulation
Lido, which operates in the staking sector, could attract the interest of the American regulator, which has been examining this activity since mid-2023. Are staking and its rewards akin to financial securities? This question has yet to be decided in the United States.
Staking is not regulated in Europe either. This should be settled in the next version of the MiCA regulation, as announced by ECB President Christine Lagarde in mid-2022. Most specialists believe that European regulators have a more open attitude than the USA.
The Lido system is based on the pooling of ethers (ETH) from users all over the world, regardless of nationality. Potentially, the assets of American investors can be mixed with those belonging to Iranians or North Koreans.
Like almost all governance tokens, the LDO token does not offer its holders the possibility of receiving income generated by the protocol, for regulatory reasons.
The SEC considers that a token which allows income to be received without consideration is akin to a financial security and should therefore be regulated as such, as it resembles dividends.
Staking is not regulated in Europe either. This should be settled in the next version of the MiCA regulation, as announced by ECB President Christine Lagarde in mid-2022. Most specialists believe that European regulators have a more open attitude than the USA.
The Lido system is based on the pooling of ethers (ETH) from users all over the world, regardless of nationality. Potentially, the assets of American investors can be mixed with those belonging to Iranians or North Koreans.
Like almost all governance tokens, the LDO token does not offer its holders the possibility of receiving income generated by the protocol, for regulatory reasons.
The SEC considers that a token which allows income to be received without consideration is akin to a financial security and should therefore be regulated as such, as it resembles dividends.
Governance
Among the largest holders of LDOs are the American venture capital funds a16z (exact weighting unknown but significant) and Paradigm (7%), two other anonymous addresses own 5% each andteam owns around 4%.
The governance quorum, which designates the minimum percentage of tokens to make a vote, has been set at 5%. This means that the Paradigm fund has the ability to pass its proposals unilaterally in the event of low participation. Like almost all DAOs, Lido's is governed by a minority of active participants.
Lido is currently working on a new governance model that would offer a role to stETH holders. This would enable them to exercise a veto over proposals submitted to the DAO for a vote. This initiative aims to strengthen decentralization and participatory democracy within the network, thereby alleviating concerns about centralization.
The governance quorum, which designates the minimum percentage of tokens to make a vote, has been set at 5%. This means that the Paradigm fund has the ability to pass its proposals unilaterally in the event of low participation. Like almost all DAOs, Lido's is governed by a minority of active participants.
Lido is currently working on a new governance model that would offer a role to stETH holders. This would enable them to exercise a veto over proposals submitted to the DAO for a vote. This initiative aims to strengthen decentralization and participatory democracy within the network, thereby alleviating concerns about centralization.
A centralizing protocol?
Lido has been criticized for its potential risk of centralizing the Ethereum network, given that ETHs staked via Lido account for a third of all Ethereum staking. However, these criticisms deserve to be qualified.
Lido relies on a network of 39 separate, independent Ethereum validators, none of whom holds more than 1.2% of the total ETH staked on Lido. Although this system isn't perfect - a quarter of these validators are based in the USA and almost half use public cloud servers, making them dependent on hosting providers such as AWS - it has nonetheless democratized Ethereum staking for the greatest number of people, and limits the weight of large platforms such as Coinbase (currently 15% of Ethereum staking).
Despite Lido's determination to improve the decentralization of its node operators, the latter are not yet sufficiently diversified, not least because 75% of them are based on Geth software. It is crucial to use a variety of software packages to guarantee continuity of network operation in the event of the failure of one of these systems.
The DAO provides a number of resources that serve the transparency of the protocol. However, like almost all DAOs, the Lido DAO has only a small number of active contributors who possess very large quantities of LDO. Indeed, the participation rate for each vote is often just over 5%, and never more than 8%. In most cases, the top 10 vote-getters account for over 80% of the LDOs counted for the vote.
Lido relies on a network of 39 separate, independent Ethereum validators, none of whom holds more than 1.2% of the total ETH staked on Lido. Although this system isn't perfect - a quarter of these validators are based in the USA and almost half use public cloud servers, making them dependent on hosting providers such as AWS - it has nonetheless democratized Ethereum staking for the greatest number of people, and limits the weight of large platforms such as Coinbase (currently 15% of Ethereum staking).
Despite Lido's determination to improve the decentralization of its node operators, the latter are not yet sufficiently diversified, not least because 75% of them are based on Geth software. It is crucial to use a variety of software packages to guarantee continuity of network operation in the event of the failure of one of these systems.
The DAO provides a number of resources that serve the transparency of the protocol. However, like almost all DAOs, the Lido DAO has only a small number of active contributors who possess very large quantities of LDO. Indeed, the participation rate for each vote is often just over 5%, and never more than 8%. In most cases, the top 10 vote-getters account for over 80% of the LDOs counted for the vote.
Competitors
Lido occupies a dominant position in the liquid staking sector, approaching a monopoly situation. Its most direct competitor, Rocket Pool, manages almost a tenth as many staked ETH and stands out for its ability to allow anyone to become a node operator, unlike Lido, which currently only works with professional operators. Swell, another competitor, shares similarities with Lido and has experienced rapid growth, not least thanks to the possibility offered to users of receiving an airdrop of its future governance token.
For Lido's competitors, the challenge of bridging this gap is considerable. Lido benefits from a very powerful network effect: its wstETH is accessible on the majority of blockchains and DeFi protocols, and enjoys higher liquidity than tokens from other liquid staking protocols.
For Lido's competitors, the challenge of bridging this gap is considerable. Lido benefits from a very powerful network effect: its wstETH is accessible on the majority of blockchains and DeFi protocols, and enjoys higher liquidity than tokens from other liquid staking protocols.
Roadmap
Lido, being regulated by its DAO, does not have a fixed, detailed roadmap. However, several clear objectives are emerging for the protocol. These include the expansion of stETH and wstETH onto new blockchains, the diversification of partner validators, and the evolution of the governance system to give stETH holders a veto over DAO proposals.
The Lido community is currently developing two new modules designed to make the integration of node operators considerably easier. Each module will represent a distinct group of operators, with a specific fee distribution structure. At present, only one module exists, grouping together 39 pre-approved validators. The envisaged new modules would offer even greater flexibility, enabling the network to be expanded to 300 node operators.
The Lido community is currently developing two new modules designed to make the integration of node operators considerably easier. Each module will represent a distinct group of operators, with a specific fee distribution structure. At present, only one module exists, grouping together 39 pre-approved validators. The envisaged new modules would offer even greater flexibility, enabling the network to be expanded to 300 node operators.
Purchase timing
.png)
The price of LDO is currently below the resistance of its all-time highs. A weekly close above $3.3 could be an interesting event for those considering an investment.
Assets in price discovery are regularly the focus of investor attention.LDO's capitalization stands at $2.8 billion, placing the protocol in 32nd position in the crypto sector. Within decentralized finance, only Uniswap (UNI) does better ($3.5 billion), but Lido is the leading protocol in terms of TVL ($21 billion).
You can acquire LDO on most major exchange platforms (Binance, Coinbase, Kraken, Bitstamp, Bitpanda, Coinhouse, Swissborg, etc.).
Fans of self-hosted wallets can use LDO on most Ethereum-compatible offerings on the market (MetaMask, Rabby, etc.).
Assets in price discovery are regularly the focus of investor attention.LDO's capitalization stands at $2.8 billion, placing the protocol in 32nd position in the crypto sector. Within decentralized finance, only Uniswap (UNI) does better ($3.5 billion), but Lido is the leading protocol in terms of TVL ($21 billion).
You can acquire LDO on most major exchange platforms (Binance, Coinbase, Kraken, Bitstamp, Bitpanda, Coinhouse, Swissborg, etc.).
Fans of self-hosted wallets can use LDO on most Ethereum-compatible offerings on the market (MetaMask, Rabby, etc.).
Focus on tokens that matter
Every week, we decipher the token of the week and give you all the keys you need to make an investment decision.
Definition, use case, roadmap, tokenomics, we help you form an opinion on the hot topics.
Definition, use case, roadmap, tokenomics, we help you form an opinion on the hot topics.
Understand Web3 trends, before the others
Anticipate Web3 trends, thanks to our exclusive interviews with top leaders and our community of insiders.
Subscribe
The first month is free. No commitment.
Understand Web3 trends, before the others
Anticipate Web3 trends, thanks to our exclusive interviews with top leaders and our community of insiders.
The Big Focus
Sent on 20.12.2023 to our insider subscribers
Presented in February and officially launched in August, Base has rapidly established itself as one of the most widely used Ethereum scalability solutions. Let's take a look at the stakes involved in its development.
The Layer 2 war has been raging for several months now, and Coinbase officially entered it on August 9, when its Base scalability solution was deployed on the mainnet.
Beyond the stated goal of onboarding "the next billion users and the next million developers on blockchain", Base has above all enabled Coinbase to find new growth drivers. And from this point of view, the launch has been a success.
In just over 5 months, Base has entered the layer 2 podium in terms of total value tied up (TVL) with just under $400 million, behind Arbitrum ($2.35 billion) and Optimism ($820 million). It even made it into the top 10 for all blockchains combined, according to data aggregated by DeFi Llama.
Base generated over $5 million in revenue from transactions made by the more than 390,000 users, according to data aggregated by asset manager 21Shares on Dune Analytics.
These good figures were largely achieved thanks to the launch last summer of the FriendTech social network, whose temporary frenzy triggered a record number of Base transactions, peaking at 1.8 million on September 14 and 1.4 million on October 2.
But speculation is not the only reason for the success of Coinbase Layer 2. "Base has set up a very comprehensive onboarding system. Unlike other blockchains, it's much easier to deploy there. Thanks to this, they were able to mobilize a sizeable community fairly quickly," remarks Mounir Benchemled, CEO of DEX aggregator ParaSwap, which also deployed on Coinbase layer 2 in September.
A strategic alliance with Optimism
To launch its layer 2, Coinbase has chosen to use OP-Stack, the optimistic roll-up developed by Optimism and launched last June.
"Today, OP-Stack is the most developed layer 2 solution. Optimism also offers the advantage of providing a clearer roadmap than its competitors, and support for more advanced projects", continues Mounir Benchemled. For a company with institutional ambitions like Brian Armstrong's, these arguments are bound to set it apart.
A few weeks after the launch of Base, Coinbase announced that it shared Optimism's vision based on the principles of a "Superchain", a network of interoperable layer 2s.
On August 24, the two companies even announced a revenue-sharing agreement for Base. In return, Coinbase Layer 2 will receive up to 118 million OP tokens (around $250 million at current prices) over a 6-year period, which will enable it to participate in Optimism's governance.
Making the most of your brand
"Even though Base has had an interesting start, in the long term it will have to find differentiating elements compared with other layer 2 solutions," warns Stanislas Barthélémi, head of blockchain & crypto at KPMG.
Base has a potential user base of over 100 million, and the power of a brand that is currently one of the most reassuring on the market in terms of regulation.
"In recent years, Coinbase has spent an enormous amount of money on simplifying its user experience as much as possible, both for its platform and for its various products such as Coinbase Wallet. It could do the same for Base, and thus secure itself some interesting traction," continues Stanislas Barthélémi.
There's no shortage of possibilities, especially since USDC, Circle's stablecoin, has been available natively on Base since early September, i.e. without the need for a bridge. For Stanislas Barthélémi, "this integration opens up a wide range of possibilities for everyday payments and cross-border transactions at lower cost. Coinbase clearly has many levers to pull to make Base viable".
Decentralization in focus
In addition to facilitating access to the blockchain for its users, Coinbase has been hammering home in recent months its desire to decentralize the operation of Base to make it "an open and neutral platform where developers and users can participate freely", explains the company, which for the moment has not revealed a precise timetable.
Once mentioned as a possibility "at some point in the future" by its General Counsel Paul Grewal, the launch of a native token for Base has for the moment been totally ruled out by CEO Brian Armstrong. "We have no plans to create a token for Base," he explained to US media outlet Decrypt in early December.
"It's harder to imagine decentralizing a layer 2 without a token," raises Mounir Benchemled. "A token provides more flexibility to set up governance models or incentives to use the protocol," he adds.
It has to be said that the American environment is not necessarily conducive to such a launch, with the Securities and Exchange Commission (SEC) having drastically tightened the regulatory screws on the crypto sector since the fall of FTX. For several months now, the SEC has tended to consider the majority of cryptos or tokens as financial securities. A reclassification that Coinbase wishes to avoid more than anything else.
"Because of this threat and the lack of clarity in the rules, many projects have put their token projects on hold," confides a French entrepreneur who has just spent several months in the United States.
20.000+
Weekly readers
750+
tokens analyzed by Whalee
450+
Companies in The Ocean
1.000+
members on Discord
FAQ_
All about The Big Whale_
Why did we launch The Big Whale?
We are convinced that, in this period of Web3 development, an expert and independent media is essential. Our aim is to provide our readers with clear, value-added information, while enabling them to understand the issues surrounding crypto-currencies. For those wishing to embark on this adventure, The Big Whale is the answer to the question "Where do I start?".
Is The Big Whale really an independent media?
Yes! The Big Whale is owned by its three co-founders, as well as part ofteam and a few minority investors. Find out more. This financial and capital independence is guaranteed by the support of our community of subscribers.
What happens if I cancel my subscription before it ends?
Your monthly or annual payment will be stopped immediately. You will continue to receive our information until the end of the subscription period.