The Lido DAO, behind the popular altcoin Lido, made a proposal during the night to sell the community 2 percent of LDO’s total supply. After this development, the value of LDO lost 20 percent. Here are the details…
Lido sells altcoins: Here are the details
Lido Finance has launched a community bid to sell 2 percent of the total LDO supply (20 million LDO) for DAI from DAO coffers at $1,452153 per LDO (7-day price average plus 50 percent premium). In addition, Lido DAO will sell 10 million LDO to Dragonfly Capital and the remaining 10 million LDO will be approved by the DAO for distribution to other strategic participants. Sold tokens will be unlocked immediately and will have full voting rights.
It is stated that this sale will take place in preparation for the bear market. Dragonfly company will lead the investment and buy 10 million tokens. The amount sold will be unlocked immediately and a buyer will be given full voting rights. According to the voting page, the price of $1.45 per LDO token is considered “eligible” and may encourage participants to become part of the Lido decentralized autonomous organization. Funds raised through sales provide the DAO with a “runway” and a buffer to avoid immediate selling pressure. However, when presenting the sale, its creators understand that the course is highly dependent on market conditions.
LDO’s price fell
Despite the detailed sales structure and the OTC nature of the deal, some LDO owners were not very happy with the current offer. It sold its tokens on the market, which aggravated the 20 percent correction we’ve seen since then. The main reason behind the LDO rally is the Ethereum Merge update, which is the main fuel for the current LDO rally, given Lido Finance’s role in the Ethereum 2.0 staking contract.
The announcement of the update date has caused a massive rally of LDO tokens that have brought their holders almost 200 percent profit in the past few days. As expected, the token was extremely overbought. It faced a short-term correction fueled by the aforementioned sell-off. Had the deal been made through exchanges, the token would have faced huge selling pressure as the amount of sales represented 25 percent of LDO’s daily volume. LDO is trading with a 10 percent drop at the time of writing. The cryptocurrency is changing hands at $1.5. Although it has lost more than 20 percent in value on a daily basis, it has increased by more than 130 percent in the last 7 days.
