By the end of Q1 - Q2 this year, Ethereum will have completed one of the most significant software upgrades in history: Ethereum 2.0.
In terms of market capitalization, Ethereum is the second-largest cryptocurrency behind bitcoin. Last quarter, 2021 the Ethereum network completed around $2.5 trillion in transactions, making it the most popular blockchain globally in terms of transaction value.
Ethereum's network is experiencing huge traffic due to its exponential expansion. As a result, it began improving the network last year. The improvement is expected to be finished by the first quarter of 2022.
We anticipate that Ethereum 2.0 will attract a large number of new users. That is why I believe it will become the next trillion-dollar coin after bitcoin.
Ethereum 2.0 will be rolled out in 3 different phases: phase 0, phase 1, and phase 2. Phase 0 began on December 1st. The following phases are scheduled to begin in 2022.
During Phase 0, Ethereum introduced the Beacon Chain and implemented the proof-of-stake (PoS) consensus mechanism.
For Ethereum 2.0, the Beacon Chain serves as a coordinating layer. Its primary job is to administer the PoS protocol for all shard chains.
Today. For consensus, Ethereum employs proof-of-work (PoW). Miners use sophisticated computer equipment to verify transactions.
Without getting too technical, PoS differs from PoW because it employs transaction validators rather than miners. Transaction validators must stake cryptocurrency to process a block. They are compensated in cryptocurrency when they correctly validate and contribute a block.
ETH token holders can now receive about 5% annual percentage yield (APY) as an incentive to migrate to the Beacon Chain.
Approximately four times the 10-year Treasury Bond's annual yield and four times the S&P 500's yearly average dividend.
Here's the issue...
You must first run an ETH2 validator and transfer at least 32 ETH (about $108,800 at current pricing) to migrate your tokens. Furthermore, you won't be able to access your tokens until Ethereum 2.0 is released early next year.
You're out of luck if you don't have hundreds of thousands of dollars in ETH to spare... or the technical know-how to transfer your tokens to the Beacon Chain. You won't be able to get that enticing 5% yield on your ETH.
That's where our next selection comes in...
It has developed a simple solution that allows anyone with ETH to deposit their tokens and receive money nearly immediately - without a long-term commitment.
The project's name is Lido DAO (LDO). With over 1 million of the 7.5 million ETH now staked in ETH2 contracts, it is the largest decentralized ETH2 staking solution.
[Staking is the process of holding ("staking") your crypto assets to their particular protocol. This contributes to network security by ensuring that your staked cryptocurrency is available to validate transactions on the underlying blockchain.
As a reward, you will receive additional cryptocurrency. It is analogous to receiving a dividend from stock or yield from a bond.]
We've found Lido to be one of the most efficient and safe decentralized staking platforms. This will broaden its application beyond Ethereum (more on that in a moment).
First, let's talk about security.
The Lido network's node operators do not have direct access to your assets_ instead, the network stores them in smart contracts. So, you keep custody.
Additionally, Lido governance token holders pick only the best node operators with established track records to run the network. This provides some protection against slicing.
PoS networks employ slashing as a risk control method. The network can automatically penalize bad or malicious node operators by removing (slashing) a portion of their stake tokens.
Anyone who stakes with a sliced node operator may get a percentage of their stake lowered. In the unlikely event, Lido provides insurance to protect its users from severe penalties.
It's also quite easy to use...
When you place an ETH bet on Lido, you receive a token representing your staked ETH (stETH) at a 1:1 ratio. For example, if you invest 100 ETH, you will receive 100 stETH in return.
Lido tokenizes staked Ethereum, allowing you to access your staked assets at any time. You can, for example, use your stETH as collateral, lend it, or sell it.
This is an unquestionable advantage of self-staking. As a result, we expect Lido's services will be in high demand beyond Ethereum.
As you can see, there are numerous benefits to staking with Lido. Moreover, despite its increasing popularity, the price of LDO has dropped dramatically.
The Lido Hyper Boom
Remember that a Hyper Boom occurs when there is a tremendous flood of new users into crypto.
Catch-Up Coins are among the most vulnerable to usage spikes. We locate the greatest Catch-Up Coins by investing in enterprises experiencing rapid growth. On the other hand, their price behavior is either heading down from its top or trading sideways.
When Lido first came onto our radar, it had plunged more than 70% from its peak in May. But, since then, there has been a Hyper Boom in usage and a subsequent price rally.
As can be seen, a rise in staked assets directly increases earnings for LDO token holders. So, this is precisely what we predicted in terms of price movement.
This is due to the fact that 5% of the income gained by Staking goes to the Lido treasury, which LDO token holders own. Furthermore, Lido's staking services do not stop at Ethereum.
That is why we anticipate increased usage when Lido grows to additional networks...
In March. Lido has begun staking Terra's native cryptocurrency, LUNA. LUNA holders, like stETH holders, can receive interest while retaining liquidity and usability.
Since the Terra network's launch, Lido is where 16 % of all circulating LUNA is staked.
And that was only last week. Lido has expanded its staking services to include Solana... Polygon is up next. Users that stake their tokens to safeguard the network are rewarded on both networks.
We believe that when decentralized finance takes off, there will be a great demand for liquid staking solutions.
Token holders desire to earn rewards on their crypto assets while still being able to transact with the native token. Lido provides them with the best of both worlds.
We anticipate that Lido will become the go-to project for liquid staking solutions. That is why it has attracted the interest of some of the leading crypto venture capital firms.
Lido secured $73 million earlier in 2021 from Three Arrows Capital, Alameda Research, Coinbase Ventures, and others. That's a significant endorsement from some of the brightest money in the crypto world.
What's It Worth?
To be clear, we are purchasing the Lido (LDO) token rather than staking cryptocurrency on the Lido network. As a result, as the price of LDO rises as a result of the Hyper Boom, we will benefit.
Lido distributes its earnings in three ways: 90% goes to token holders who stake on Lido, 5% goes to node validators, and 5% goes to the Lido treasury.
The treasury is controlled by LDO token holders. We expect token holders to pay themselves with increasing treasury earnings in the future.
To determine the worth of Lido, we will project its total income from Ethereum and the other cryptos staked on the platform.
Based on the staking rates of other PoS networks such as Cardano, Solana, and Polkadot... we anticipate that roughly half of all circulating ETH will be staked once ETH 2.0 is launched.
Because Lido is the finest platform for liquid Staking that we are aware of, we believe it has the potential to capture one-third of all staked Ethereum. This equates to around 19.54 million ETH.
We expect Ethereum's staking incentives to fall to around 2% as it moves to Ethereum 2.0 to accommodate the growing number of token holders trying to generate money.
That equates to around 390,800 ETH in earnings every year. And 5% of that, or around 19,540 ETH, would go directly to the Lido treasury (and to LDO token holders).
In the future years, I believe ETH will reach $25,000. At that cost. Lido's annual earnings would be $488 million.
We may compare Lido to traditional asset management like BlackRock by valuing it only on its ether holdings. the world's largest investment management service
BlackRock is now valued at 25 times its earnings. Because Lido's development potential is significantly greater, I believe we could easily fetch a multiple twice that.
Adding a 50 multiple to Lido's annual ETH income yields a valuation of $24.4 billion ($488 million x 50).
However, keep in mind that Lido is spreading its services to additional networks and applications.
Outside of bitcoin and Ethereum, the value of crypto assets is at $956 billion. We believe it has the potential to more than fivefold in the future years, reaching $5 trillion. (By comparison, the total value of the gold market is $11 trillion.)
Many of these platforms also offer incentives for users to stake their tokens.
Let's say Lido tokenizes only 2% of these assets. It also earns users 10% each year. If we assume the same 5% take, the Lido treasury may earn an additional $500 million.
Applying a 50 multiple to that would result in a $25 billion increase in the value of the LDO token. When combined with its ETH earnings, Lido might be worth $49.4 billion.
A 1 billion token supply works out to $49.43 per token or an 891 % increase over the current price.
A $500 investment would be worth $4,953, and a $1,000 investment would be worth $9,906.
But, as with ETH, I believe Lido has the ability to take considerably more than 2% as it establishes itself as a global leader in liquidity staking solutions.
Over time, I believe Lido might acquire as much as 30% of the cryptocurrency market. And, assuming the same 10% stake in these staked assets and a 5% take for the Lido treasury, Lido would earn $7.5 billion per year.
Applying an earnings multiple of 50 to Lido and its LDO token holders translates to an additional $375 billion in value.
When the market value from Ethereum staking income is factored in, the total market cap is $399.4 billion ($24.4 billion + $375 billion).
In this hypothetical scenario, each LDO token would be worth $399.43, representing a 7,905 % gain over the current price.
This would increase a $500 investment to $40,023. And every $1,000 invested is worth $80,046.
Achieving such kinds of returns in the stock market would take approximately 63 years.
Friends, by owning LDO, we have the opportunity to profit from income-generating opportunities across almost every network through Staking. It's a huge opportunity.
That is why you should act now and add it to your portfolio.
Action to Take: Buy Lido Dao (LDO).
Buy-up-to Price: $12
Stop Loss: None
Buy It On: Uniswap, SushiSwap, Ox Matcha
Store It On: MyEtherWallet
