Lido Cuts 15% Amid Institutional ETH Staking Surge
Lido announced on August 4 that it will cut 15% of its workforce to control costs and ensure long-term sustainability. This job cut comes as institutional ETH staking growth accelerates. Data since July 21 shows more ETH queued for unstaking than new stakes, with a peak differential of 500,000 ETH, while strategic reserves like BitMine and SharpLink have amassed 1.35 million ETH. Institutions favour centralized staking services such as Anchorage, Coinbase Custody and offline ETF staking for clear compliance, liability and insurance coverage. On July 30, the SEC clarified that certain liquid staking derivatives are not securities, paving the way for spot ETH staking ETFs by BlackRock and others. In the short term, LSD tokens like PRL and SWELL jumped over 18%. In the long run, low-fee, professionally managed staking ETFs may challenge decentralized platforms like Lido. Traders should monitor ETH staking yields, LSD token spreads and ETF launch timelines.
Bullish
The institutional ETH staking surge reduces circulating supply and signals stronger long-term demand for ETH. Lido’s job cuts highlight cost pressures in decentralized staking but also underscore the migration to compliant, insurance-backed services. Short-term token rallies in PRL and SWELL reflect positive sentiment around staking ETFs. Over time, professional staking products could lock up more ETH, tightening supply and supporting price gains, despite increased competition for decentralized platforms.