Ether, Dogecoin Lead Crypto Market Bounce; Lido's Staked Ether Breaks Into Top Ten
Shapella’s stable rollout likely drove positive sentiment to Ethereum staking-based protocols.
A successful Shapella rollout on Ethereum has powered ether and other alternative cryptocurrencies higher, heating up the “alt season” narrative on Crypto Twitter.
Ether added over 10% in the past 24 hours, trading at 11-month highs above $2,120 during the Asian trading hours. Thursday’s Shapella upgrade ushered in a major development for the Ethereum network, allowing users to stake and unstake tokens from the network at will – improving the network’s overall outlook.
Governance tokens of the liquid staking protocols saw outsized gains, with Lido’s LDO and Rocket Pool’s RPL surging as much as 14%. Both protocols lock billions of dollars to provide yields on ether staking to users, who can stake any amount of ether to earn rewards while retaining the liquidity of locked coins through derivative tokens and without putting up the required 32 ether to run a validator node.
Lido’s staked ether tokens (STETH) climbed into the top ten cryptocurrencies by market capitalization of $12 billion, which is the amount of ether locked on the protocol.
Valerie Tetu, head of strategy at Lido Finance, told CoinDesk that the Shappella upgrade likely led to improved confidence among users.
“Staking withdrawals enabled by the Shanghai upgrade represent a significant milestone in the development of the Ethereum blockchain,” Tetu said over email. “Withdrawals will allow stakers to participate in securing the network with more confidence while increasing the capital efficiency of the tokens they decide to allocate.”
“With regards to the staking ecosystem, the ability for users to withdraw their tokens will support healthy competition across platforms and providers, as well as a broader diversity of staking offerings and architectures to flourish,” she added.
Meanwhile, dogecoin (DOGE) gained for the second straight day. Much of the run came as trading service eToro said it would offer crypto trading directly from the Elon Musk-owned social media giant Twitter, which likely drove speculations of doge being eventually adopted for use as payments on the platform.
Musk is a vocal dogecoin proponent and has expressed support for the Dogecoin network’s development several times in the past.
Elsewhere, ADA surged nearly 9% on the back of fundamental growth in the Cardano network, such as wider support for decentralized application (dapp) development.
Some market observers expect the rally to continue over the next few weeks.
“Many traders had been waiting for the end of the upgrade to start long position accumulation therefore neutral news about the US inflation plus deferred demand pushed ETH price up today,” Ilya Volkov, co-founder of crypto services platform YouHodler, told CoinDesk in an email.
“ETH stays in the same upward trend channel from the beginning of the year. If the macro situation does not get worse, unlikely the current trend will be changed near future despite the fact that selling pressure is going to increase following weeks due to unlocking liquidity,” Volkov added.
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