stETH - Market Depth

Overview

This indicator measures the amount of volume the market can process on both the buy-side and sell-side at a specified price impact percentage. Price impact is the difference between the expected price of a trade and the price at which the trade is executed.

How can I use it?

This indicator helps understand the depth and liquidity of the market. A higher volume at a given price impact percentage indicates more liquidity, suggesting that large trades can be executed without significantly affecting the asset's price. This is useful for traders and investors planning to execute large trades, as well as for assessing the overall health and liquidity of the market.

Given that a substantial portion of Ethena's collateral comprises stETH, this indicator is particularly valuable. Understanding the price supports and the trading dynamics of the assets helps users anticipate how the value of USDe collateral might respond in times of financial distress.