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Lido’s wstETH sees interest on Aave, but other challenges lie ahead

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The Lido protocol was on an impressive run over the past few months. However, due to the FUD caused by the recent SEC speculation, the Lido protocol was impacted negatively.Despite all the FUD, Lido’s wstETH was able to generate massive interest from holders.Read LDO’s Price Prediction 2023-2024According to new data provided by Mark Zeller, a DAO delegate and an active participant in Aave’s governance, the demand for wstETH on the Aave protocol increased materially.Over the past few days, the liquidity for wstETH on Aave reached 95% of the current supply cap.

Due to such a high demand for wstETH, there was a new proposal laid out so that the supply cap for wstETH can be increased.Even though the demand for Lido’s wstETH increased, the overall interest in the Lido protocol itself, fell.This was indicated by the number of unique users on the protocol which started to decline.

According to Messari’s data, the number of unique users decreased by 0.34% in the last week.The fall in APR may have impacted the decline in unique users on the protocol.

Based on Dune Anlaytics’ data, it was seen that the APR of Lido fell from 10.2% to 5.25% over the past few months.Source: Dune AnalyticsAlong with the protocol, the LDO token’s health was also impacted.A falling network growth implied that the number of times LDO transferred for the first time by new addresses, declined.

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