$500K worth of stETH redeemed in 3 hours as Lido enables withdrawals

The Lido liquid staking protocol has enabled Ether withdrawals for the first time, according to May 15 data from Parsec Finance. Over 260 Lido Staked Ether (stETH) was redeemed for its underlying Ether (ETH) in the first three hours, worth about $500,000.

Lido is a liquid staking derivatives (LSD) protocol that allows ETH holders to stake their coins with participating validators and earn additional ETH as a reward. When users stake their ETH with Lido, they receive stETH in return. As users earn ETH from staking, their stETH increases in quantity to reflect the additional rewards.

However, before the April 13 Shapella upgrade, Ethereum did not allow validators to withdraw their Ether held in the staking contract. Even after Shapella, Lido users couldn’t withdraw their ETH because Lido’s software did not have a withdrawal function. But on May 15, the Lido decentralized autonomous organization voted to upgrade Lido to version two, allowing withdrawals for the first time.

Related: New Cosmos chain will use liquid staking coins for security

Data from Parsec shows that it took about an hour for stakers to realize that they could withdraw. The first hour of withdrawals produced around 4 ETH ($7,308) worth of redemptions of stETH. But the following hour, redemptions swelled to approximately 227 ETH ($414,956). The pace of redemptions fell the following hour to around 44 ETH ($80,388). Over $500,000 worth of ETH was withdrawn in the first three hours of withdrawals being enabled.

ETH withdrawals on Lido. Source: Parsec

Liquid staking solutions have gained in popularity since the Shapella upgrade. On May 1, liquid staking became the top decentralized finance category in terms of total value locked, surpassing even decentralized exchanges, according to DefiLlama. However, there are still some legal questions around liquid staking in the United States, as the Securities and Exchange Commission has recently stated that it may see staking providers as securities issuers.

All Dutch and English crypto news!

Bybit gets “in-principle” approval to begin operations in Kazakhstan

Bybit has been in the process of expanding its service offerings. Bybit received "in-principle" approval from the Astana International Financial Centre to begin operations in Kazakhstan. The...

Crypto analyse: Bitcoin maakt de beste candle van deze maand

Bitcoin heeft vannacht zijn wekelijkse candle gesloten met maar liefst 5% in de plus. Dit is een positieve wending in een maand vol rode candles....

Vakantie op Bali? Tip: wees voorzichtig met betalen in crypto en Bitcoin

De verkiezingen komen er aan, en de zittende gouverneur van het Indonesische eiland Bali heeft stemmen te winnen. Eerder beloofde hij iets te doen aan...

Tourists are unhappy with crypto payments ban in Bali

The government of Bali, Indonesia, recently cracked down on crypto payments for goods and services and reminded tourists that the Indonesian Rupiah is the only...

Beste exchanges

Koop je crypto bij Bitvavo