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The decentralized finance (DeFi) token Lido DAO ($LDThe 2024 Guide to the Top 4 Smart Crypto Wallets: Reviewing Plus Wallet, Safe Wallet, Coinbase, and Argent!O) experienced a significant downturn, dropping over 10% within 24 hours. This drop comes in the wake of three major initial Lido DAO members—Paradigm, Delphi Digital, and KR1 plc—offloading a collective $49.6 million worth of $LDO tokens to centralized exchanges (CEXs). The sales occurred during last week’s market rally, which saw $LDO experience a brief surge before these heavy outflows triggered a price decline.
$LDO dropped over 10% in 24H after 3 initial Lido DAO members offloaded $49.6M worth of $LDO to CEXs during last week's rally:
— Spot On Chain (@spotonchain) November 11, 2024
1/ #Paradigm deposited 36.51M $LDO ($47.7M) to Coinbase Prime, now holding 33.49M ($41.9M).
2/ #Delphi Digital moved 859,703 $LDO ($1.13M) to… https://t.co/0RrZfFd9He pic.twitter.com/EHs7efsexN
According to Spot On Chain, Paradigm Capital led the sales by donating 36.51 million $LDO worth approximately $47.7 million to Coinbase Prime. The firm, a major player in the DeFi space, now holds 33.49 million $LDO, valued at about $41.9 million. This marks Paradigm’s second recent move, following an earlier deposit of 15.12 million $LDO to Coinbase Prime. Paradigm initially acquired 70 million $LDO for 15,120 ETH ($53.25 million) in 2021 at an average cost of $0.76 per token. With the recent price surge, Paradigm’s total holdings now yield an estimated profit of $38.4 million, reflecting a 72% gain. However, the consecutive deposits hint at a gradual liquidation strategy, possibly influencing $LDO’s recent price volatility.
Other Major Sales Signal a Tough Start for DeFi Tokens
Delphi Digital and KR1 plc also made substantial transactions. Delphi Digital transferred 859,703 $LDO (worth $1.13 million) to Wintermute Trading four days before the sell-off intensified. Additionally, KR1 plc deposited 600,000 $LDO (valued at $749,000) to Kraken, reducing its holdings to 11.3 million $LDO, which is currently worth $14.25 million. These outflows signal a trend of key stakeholders taking profits, possibly due to anticipated market shifts or strategic reallocations within their portfolios.
The heavy $LDO sales by prominent DeFi investors suggest potential caution among institutional holders. As a result, $LDO and other DeFi tokens have entered the week on a rough note, facing pressure from both sell-offs and market volatility. While $LDO’s price initially saw a sharp increase, it soon retraced as the significant outflows impacted overall sentiment. Will DeFi tokens, including $LDO, rebound from this sell-off, or will the market see a sustained bearish trend in the coming weeks? With Paradigm and other significant holders liquidating portions of their holdings, all eyes are on DeFi market dynamics to see if a recovery is on the horizon or if further drops await.