(1/2) Some updates on the market and the strategy’s overweight in Lido (splitting the post into 2 because of length limit)
On the overweight in Lido:
- The thesis is actually pretty simple. After the ETH merge, anyone holding ETH is missing out on ~5% yield per year because they are not staking the ETH they hold.
- Lido has a dominant market position in the ETH liquid staking space. Check this Dune dashboard out to learn more about Lido’s market position: https://dune.com/LidoAnalytical/Lido-Finance-Extended
- Generally, I expect ETH to outperform BTC in the upcoming cycle, and then expect Lido to outperform ETH.
- LDO is not another shitcoin that doesn’t do anything. It is one of the few coins that actually (1) has a dominant market position, and (2) accrues value back to token holders by sending 5% of the yield generated from TVL to the treasury.
- It is difficult to time the market but personally I am a top 50 LDO holder myself with no plan to sell anytime soon. I would only become bearish on the project if they start losing the dominant position in the liquid staking space.
- Some behind the scenes: I requested Iconomi to add LDO back in May 2022 but they only added it in August after I complained multiple times. If they added it sooner, CCC’s position in LDO would still be in the money (which significantly outperformed BTC/ETH during the same time horizon).
Yes your right. We can be wrong. But there is no cummunication, so im in doubt to get my money out of this strategy and just buy myself LDO on a other exchange and manage it myself