Liquid staking protocol Lido (LDO) anticipates its users making large staked Ethereum (stETH) withdrawals this week following the successful completion of its V2 upgrade.
Withdrawal request spikes
According to 21Shares researcher Tom Wan, Lido users have started increasing their withdrawal requests following the successful test of the feature.
Wan identified a wallet that requested the withdrawal of 6,000 stETH tokens. The Dune analytics dashboard showed 123 requests to withdraw 13,740 stETH.
This amount is expected to increase significantly, especially when top entities staked with Lido start processing withdrawals.
A separate Dune Analytics dashboard showed that the protocols have successfully processed 14 withdrawals for 286 ETH.
Celsius moved 428k stETH
Bankrupt crypto lender Celsius moved its 428,000 stETH worth $780 million on May 15, prompting speculations that it wants to process a withdrawal from Lido.
In its heyday, Celsius staked ETH from its customers on Lido for stETH and then used the stETH as collateral on DeFi lending platforms like Aave to generate yields. While this was a sound business strategy theoretically, its inability to convert stETH to ETH led to liquidity problems that eventually played a role in its bankruptcy.
With redemptions now possible, several analysts have predicted that the lender could exchange its stETH for ETH and use it for its restructuring plan.
Meanwhile, the company is yet to make any major withdrawal requests from Lido. However, it has executed a withdrawal of 0.1 stETH.
A researcher at Blockworks Westie noted that if Celsius should decide to withdraw all its stETH through Lido validators, “it would contribute around 13k validators and a 7-day queue.”
Lido explained in a May 16 tweet that it was prepared for such large-scale withdrawals. The protocol claimed it has around 440,000 ETH in its buffers to “absorb” such requests.
The post Lido anticipates ‘large withdrawals’ as users’ staked Ethereum withdrawal requests increase appeared first on CryptoSlate.
Credit: Source link
