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Ethereum liquid staking governance tokens fall ahead of Shapella upgrade

Crypto Ecosystems • April 12, 2023, 7:28AM EDT

Quick Take

  • Prices for governance tokens of top liquid staking protocols have fallen ahead of Shapella.
  • Shapella will let crypto users unstake their ether.

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The prices of major governance tokens for Ethereum liquid staking protocols have dropped ahead of the network’s upgrade slated for later today.

The three biggest governance tokens for liquid staking protocols have dropped between 4.6% and 9% in the last 24 hours, according to CoinGecko — cementing losses of 7% to 13.7% over the last week. These tokens are lido DAO, rocket pool and frax share.

A graph showing the price of LDO

The price of lido DAO has slid over the last week. Image: CoinGecko

These losses are worse than ether, which has only lost 2.4% of its value in the last 24 hours and 2% over the last week.

Arkham Intelligence noted that wallets it has tagged as belonging to prominent anonymous crypto trader Sisyphus sold $400,000 of lido DAO over the last few days. 

Liquid staking protocols allow people to stake their ether and receive a derivative token that represents the locked cryptocurrency. This derivative is able to be used across various crypto markets, effectively making the locked coins liquid. The governance tokens are used to manage how the protocols develop and are typically associated with its success.

The Shapella upgrade — a portmanteau of two upgrades called Shanghai and Shapella — will take place at epoch 620,9536, expected at 6:27 p.m. EDT on April 12. It will allow ether stakers to unstake their ether and withdraw their coins.