Lido DAO Governance Token Surges on Armstrong Comments About SEC Staking Ban
The governance token for the liquid staking platform Lido has surged on rumors signal boosted by Coinbase CEO Brian Armstrong that the Securities and Exchange Commission (SEC) might ban staking for retail customers.
LDO, the governance token of the decentralized autonomous organization behind Lido, surged around 11% in the immediate aftermath of the comments, and is up around 8.4% in the past 24 hours.
The Lido protocol, governed by the LDO token, allows for the staking of ether. Users are given a token called stETH which represents their staked position in ether, and they will be redeemable 1:1 for ether after next month’s network upgrade named ‘Shanghai’. As a decentralized protocol, it's unlikely it will have the same compliance with securities rules as a U.S.-domiciled centralized entity like Coinbase.
On-chain data shows that Lido currently has a market share of 25% of the staking pool market.
Coinbase has 11.5%, while Kraken has 7%. Should the SEC make the move that Armstrong says it might, this would be a boon for Lido allowing it to capture the market that Coinbase and other U.S. domiciled providers have.
The SEC has declined to comment on the rumors.