Lido Finance withdrawal activation: only 0.42% processed so far

Lido Finance – the largest liquid staking protocol on Ethereum – upgraded to version 2 earlier this week. The move essentially enabled liquid staking users, meaning holders of staked ether (STETH), to withdraw STETH from Lido at a 1:1 ratio of ETH to STETH.

Latest figures show that only 0.42% withdrawals have been processed so far.

after v2 upgrade

According to Switzerland-based 21Shares’ EstimateLido Finance currently owns 31% of the total ETH holdings. There are approximately 6.7 million stETH in supply. Out of which 448.04k stETH has been sent to Lido for withdrawal request.

Celsius Network, the bankrupt CeFi lender, accounted for the vast majority of withdrawal requests, with approximately 448.04 stETH, according to Dune, an on-chain analytics provider.

Meanwhile, Lido has a 470k ETH buffer to handle withdrawals that accumulate execution layer reward (priority fee/MEV), partial withdrawals, as well as daily ETH deposits from new stakeholders via the staking platform. With only 0.42% of withdrawals processed so far, an analysis by 21Shares noted that Lido may not require any validators to exit the network in order to honor all withdrawals.

“With the current amount of $stETH requested to be withdrawn, Lido will not require any validators to exit the network in order to honor all withdrawals and still have 20k $ETH remaining as a buffer. “

Activating Lido Finance Withdrawal

Lido Finance, which has over $12.41 billion in Total Value Locked (TVL), deployed its v2 iteration on 15 May. The move was made through an on-chain vote, with community members deliberating on the proposal.

The upgrade, which includes lower gas fees and enhanced security measures, comes a month after the Shepela hard fork, which allowed staking validators to withdraw ether. Lido’s V2 covered a total of nine audits from a number of firms such as Statmind and MixBytes.

Celsius on the other hand unstake $779 million of ETH with the Liquid Staking derivatives protocol. The fund movement was speculated to be used by the troubled crypto lender as part of its restructuring and creditor repayment efforts.