Should LDO holders be worried? Institutional investors’ selling spree means…

ambcrypto.com:

Lido has been dominating the LSD (Liquid Staking Derivative) space since the beginning of the year. However, despite its rising TVL and the protocol’s positive performance, many investors and validators have lately started to liquidate the assets that were assigned to them.

Read LDO’s Price Prediction 2023-2024

The same was evidenced by data shared by popular analyst – tumileth. According to the same, early investors in Lido such as ParaFi Capital and Wormhole Finance sold 100% of the LDO that was allocated to them. Additionally, other institutions such as 3AC and Alameda Research were also observed to be selling a significant majority of their holdings.

However, one of the biggest sell-offs of the LDO token was done by Terraform Labs. Terraform Labs had initially invested $2 million in LDO and were allocated 20 million LDO tokens in return.

At press time, they managed to gain roughly $40 million by selling all their holdings.

15.3M $LDO ($32M at that time) sold on DEX at an average price of $2.1

4.7M $LDO ($9.4M at that time) was transferred to #Binance on May 9, when the price was $2. pic.twitter.com/EYkCxnF4VU

— Lookonchain (@lookonchain) March 12, 2023

Large addresses decreasing their LDO holdings caused the percentage of LDO held by them to drop. Despite the negative impact of these sell-offs on LDO’s price in the short-term, it would end up making the LDO network more decentralized.

One possible explanation for the high sell-offs is that institutions like Alameda and 3AC went through challenging periods. Ergo, they needed to sell assets to maintain liquidity.

Other factors such as declining network