Lido (LDO), a crypto token associated with the Lido Decentralized Autonomous Organization (DAO), has lost nearly 10% in value in recent trading sessions after rumors spread that insiders may be withdrawing tokens from the platform.
According to a recent tweet, the value of Lido dropped by about 24% after an address related to the token transferred about 3.5 million LDO ($3.1M) into major crypto exchanges like Binance, OKX, Bybit, and Gate. The same address has liquidated about 21.31 million LDO ($21.24M), moving them to different centralized exchanges in the past 6 days.
Suspected Insider Activity
The activities of the address, which suggested increased selling pressure, caused the price of LDO to fall from $1.16 to $0.88 at that time. LDO may face further price declines or increased volatility in the short term, given the recent correction.
Following the withdrawal of that significant amount of LDO tokens from the platform, the news sparked speculation about potential insider involvement.
Although the severity of the drop in value has somewhat reduced at the time of writing, with the loss narrowing from a substantial 24% to a still-significant 10%, the rumors surrounding insider withdrawals undoubtedly left their mark on LDO’s price, exerting considerable downward pressure and highlighting the market’s sensitivity to such developments.
Lido DAO Holds to Vote Out Chorus One
Earlier this month, the Lido DAO, the body responsible for managing the Lido liquid staking protocol, held an emergency voting process to replace one of its oracles’ addresses.
According to the body, the Chorus One oracle, a bridge between real-world data and blockchain systems, faced a critical security issue, which resulted in the unauthorized draining of its Ether balance.
After the security breach, the team announced that the issue was confined to the Chorus One oracle and did not impact the broader system. Also, further investigations suggested that the exploit may have been attributed to a leaked private key.
In the period leading up to the incident, Lido had been experiencing remarkable growth, consistently reinforcing its reputation as the leading liquid staking protocol on Ethereum. Last year, Lido’s liquid staking solution, which enables users to stake their Ether without locking it in the staking process, recorded $1 million in validators.
