Lido’s Moment of Glory
On May 15, 2023, the Lido liquid staking protocol made waves in the crypto world by enabling Ether withdrawals for the very first time. Within just three hours, over 260 staked Ether (stETH) was redeemed for its underlying Ether (ETH), amounting to a staggering $500,000. Talk about a new dawn for crypto enthusiasts!
A Peek at the stETH Withdrawals Dashboard
The excitement didn’t stop with the withdrawals. The new stETH withdrawals dashboard offers several insightful features:
- Individual & Aggregate Withdrawal Requests: Check out how many Ether are being pulled out by users, both individually and in total.
- Current Withdrawal Queue: Keep track of who’s ahead in line waiting to cash out their stETH.
- Large Balance Changes: Spot any sudden shifts in stETH balances that could indicate larger movements in the market.
The Mechanics of Lido
For those still on the “What is Lido?” train, here’s the scoop: Lido is a liquid staking derivatives (LSD) protocol. It allows ETH holders to stake their coins and, in return, they receive stETH. The beauty of this system lies in its rewards; as users earn ETH from staking, their stETH balance increases to reflect these gains.
The Road to Withdrawals
Before the April 13 Shapella upgrade, Ethereum didn’t allow validators to withdraw their Ether from the staking contract. Post-upgrade, even Lido stakers faced a roadblock as prior software updates didn’t support withdrawals. But all that changed when, on May 15, the Lido decentralized autonomous organization cast its votes to upgrade to version two, effectively opening the floodgates for withdrawals!
Withdrawal Surge: The Numbers Tell a Story
According to Parsec Finance, stakers were quick on the draw. It took about an hour for users to catch wind of the new withdrawal capabilities. The first hour saw around 4 ETH (equivalent to $7,308) being redeemed. Then came the flood! The second hour witnessed a shocking uptick where redemptions rocketed to approximately 227 ETH (worth $414,956). The wave didn’t last forever, though, and in the third hour, activities slowed down a notch to about 44 ETH ($80,388). Still, over $500,000 in ETH had exited the platform within the first three hours!
Why Lido is So Hot Right Now
Liquid staking has surged in popularity since the Shapella upgrade, even outpacing decentralized exchanges in terms of total value locked as of May 1, according to DefiLlama. However, with growth comes scrutiny; the U.S. Securities and Exchange Commission is raising eyebrows and questioning whether staking providers might be viewed as securities issuers. It seems that just when you think you’re in the clear, the regulatory sharks start circling!
