A token known as "staked ether" has suddenly become a key focus for crypto traders trying to monitor extreme stress in digital-asset markets, as important players from the beleaguered lender Celsius to the hedge fund Three Arrows Capital and the industry heavyweight Sam Bankman-Fried's Alameda Research are dumping their holdings.
The key metric is the discount between the price of staked ether (stETH) – a token from the Lido Finance protocol that's supposed to trade at a price close to ether (ETH), the native cryptocurrency of the Ethereum blockchain – and the price of ether itself.
The speculation, according to analysts, is that crypto market makers and lenders might be forced to dump their holdings of the stETH tokens to fund withdrawals and meet margin calls.
Staked ether was launched by decentralized-finance (DeFi) platform Lido Finance as a way to provide liquidity to traders who are "staking" their ether on Ethereum's Beacon Chain. It's all part of the process by which...
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