Lido Finance Reaches 6 Million ETH Staked After Shanghai Upgrade

Lido Finance Reaches 6 Million ETH Staked After Shanghai Upgrade

Lido Finance, a decentralized finance (DeFi) system, has 6 million Ether (ETH) on its liquid staking platform despite inflows from the Ethereum blockchain’s Shanghai upgrade.

The Shanghai upgrade event of Ethereum not only allows the validator to retrieve its staking until 2020, but it also facilitates a considerable amount of funds to flow back into the blockchain through staking protocols, with Lido Finance being the most notable one.

According to Dune Analytics statistics, Lido Finance received 105,644 ETH in the past week, increasing the total staking deposits to 6,018,080 ETH. The platform has a user base of over 188,000 stakers and holds investor assets worth approximately $12 billion.

Nansen reports that although Lido currently holds a 79% market share in staking protocols, it is facing mounting competition from newcomers such as Frax Finance and Rocket Pool. The two new protocols garnered $367 million in deposits in the previous week.

Lido has announced that its users will not be able to withdraw their staked funds immediately after the Shanghai upgrade event. Instead, they will have to wait until mid-May when Lido deploys its updated v2 protocol. The purpose of the delay is to ensure that the protocol passes security testing and to allow the network to stabilize.

This is the longest waiting period compared to other companies like Binance, Coinbase, Kraken, and others, which enabled ETH withdrawals a few days after the Shanghai upgrade.

Beaconcha.in statistics reveal that more than 2 million ETH was withdrawn and restored to circulation after the completion of the Shanghai upgrade on April 13. Due to the high withdrawal rate at the time, validators had to wait up to 17 days to withdraw their assets.

Lido has not enabled withdrawals yet and is waiting for the introduction of its v2 protocol update later this month. Users who choose to exit the platform can sell their stETH derivative token on exchanges as the token’s price is similar to that of ETH.

Kunal Goel, an analyst at Messari, wrote in a report that Lido is unlikely to face significant withdrawal pressure as the price of stETH is close to that of ETH. However, Ethereum has witnessed a substantial increase in the amount of ETH deposited into staking lately. Validators actively withdraw their staked ETH and reload it into Liquid Staking protocols to benefit from greater liquidity flexibility.

About Lido Finance

Lido Finance is a liquid staking solution on Ethereum that allows users to stake their ETH while maintaining its liquidity. Instead of locking up their ETH for a certain period of time, users can deposit it into the Lido protocol and receive staked ETH (stETH) tokens in return, which can be traded or used in other DeFi applications.

Lido operates as a DAO (decentralized autonomous organization) and is governed by its stETH token holders. It was launched in 2020 and has quickly become one of the leading staking protocols on Ethereum, with a significant market share.

To access more crypto news: cryptodataspace.com