Lido [$LDO] extended its downward trend on August 1, recording a 9% loss for the day. The pullback came shortly after the token closed July on a positive note, having gained more than 30% over the month.

The nature of the decline remains uncertain — whether it signals a structural shift or simply reflects broader bearish sentiment across the cryptocurrency market. AMBCrypto examined on-chain metrics to assess the current market direction for the asset.

TVL Decline Fits a Broader Bullish Pattern

Lido is the largest liquid staking protocol in decentralized finance, allowing users to stake assets like Ethereum while receiving tradable derivative tokens in return. Its total value locked (TVL), a key indicator of protocol health measured by deposits locked on-chain, is closely watched as a proxy for staking demand across the broader Ethereum ecosystem.

The drop in $LDO price has coincided with a corresponding retreat in TVL.

Over the past 24 hours, TVL fell by $414 million, bringing the total to $17.573 billion. Despite this decline, Lido's market dominance remains strong, and the dip aligns with the structural pattern observed over the past 30 days.

During the last 31 days, the protocol recorded approximately $3.247 billion in total inflows, translating to an average daily inflow of roughly $104.74 million. The latest daily decline mirrors the fluctuations seen throughout this period, suggesting that inflows could resume.

Token Holder Income Reaches All-Time High

July saw a notable increase in token holder income. According to DeFiLlama, holder income reached $2.08 million — the highest figure recorded since the program's inception.

This income does not represent direct distributions to token holders. Instead, it operates as a buyback mechanism designed to manage $LDO supply in the open market. Under this model, a portion of protocol revenue is used to repurchase $LDO tokens, reducing circulating supply over time. The record July figure comes as liquid staking continues to account for a growing share of total staked ETH, bolstering protocol fee generation.

As the price declined, the Holder Count dropped by 60, settling at 86,060 at press time. Fee generation, however, remained stable. The protocol generated $1.2 million in fees, close to its 30-day daily average of $1.13 million.

Continued growth in token holder income alongside steady fee generation could provide support for $LDO and may limit additional downside.

Active Users Continue to Climb

Network activity has been increasing, with daily active users rising steadily. The latest data shows daily active users reaching 2,900 at the time of the report.

Sustained growth in user engagement reinforces the asset's underlying utility and indicates ongoing participation in the protocol. User retention and staking participation trends remain key metrics to monitor as Ethereum staking dynamics evolve following the network's transition to proof-of-stake.

Summary of Key Metrics

Lido's TVL declined $414 million over 24 hours to $17.573 billion, consistent with the 30-day pattern in which daily inflows averaged $104.74 million. Token holder income reached a record $2.08 million in July, while daily fees held near $1.2 million, indicating continued demand despite the price slide.

Source: AMBCrypto