Lido, the trailblazer in liquid staking, has set a new milestone with the rollout of its second version (V2) on the Ethereum network.
The V2 upgrade allows users to unstake their stETH directly and exchange it for Ethereum (ETH) at a 1:1 ratio. This operation typically takes around a day when the exit queue on the Beacon chain is not backed up, as stated in Lido’s blog post. However, during peak network activity, this process can extend up to 5 days and 14 hours, according to data from network explorer Rated.
This upgrade has already had a positive impact on LDO, Lido’s native governance token, which saw a 10% price boost to $2.15 within 24 hours of the announcement.
As part of the unstaking process, users will receive a Lido-issued NFT that represents their withdrawal request. They can then use the NFT to claim their ETH rewards, after which the NFT is burned. Lido marketing lead Kasper Rasmussen clarified that “secondary market activity does not play a role in the withdrawal process”, even though the NFT could be listed for trading on Blur and Opensea.
Lido currently dominates nearly 80% of the liquid staking derivatives market on Ethereum, according to blockchain analytics firm Nansen. The company has already withdrawn more than 278,000 ETH, making it the fourth largest entity by ETH withdrawals, following crypto exchanges Kraken, Coinbase, and Binance.
The V2 upgrade has undergone extensive audits, with one remaining audit by Oxorio expected to wrap up by the end of May. The introduction of V2 is a critical step towards “derisking the entire Lido tech stack,” according to Vice President of the Stanford Blockchain Club, Kydo.
Celsius Makes Major Moves Amid Lido’s Upgrade
As Lido unveils its features, Celsius, a crypto lender currently navigating bankruptcy issues, is making significant moves of its own. The lender transferred a staggering 428,015 stETH, equivalent to $781 million, to the Lido staked Ethereum wallet. This substantial transfer is widely viewed as preparation for withdrawal following Lido’s V2 upgrade.
Bitcoin pioneer and Celsius creditor, Simon Dixon, hypothesized that Celsius might be planning to stake directly, eliminating the need for intermediaries like Lido. This substantial transfer could also be part of Celsius’ restructuring plans, serving as loan collateral.
428k #Celsius $stETH on the move – likely lining up for staking directly without #LIDO in the middle. That’s the loan collateral proposed for NewCo. Should get an update during court hearing this week – 17th May – No court approval needed for this it seems https://t.co/pwT4fR1Qjt https://t.co/4tdSsMegA8
— Simon Dixon (@SimonDixonTwitt) May 15, 2023
Last week, Celsius transferred 40,928 ETH to a smart contract called “Figment ETH2 Beacon Depositor 1,” which was then moved to the Ethereum Beacon Chain deposit contract on May 12, as per Etherscan.
Despite these shifts, Lido remains a significant player in Ethereum staking, accounting for 29% of all staked Ether (ETH) — amounting to 6.27 million ETH, currently valued at around $11.3 billion.
On-chain analytics firm Nansen reports that there are currently 54,046 ETH in the withdrawal queue, not including the Celsius stash.
