Market-leading liquid staking platform Lido has enabled staked ETH withdrawals. The move came as Lido launched the V2 upgrade live to mainnet on May 15.
The upgrade is the largest yet for the protocol, and it has two major components:
“Lido V2 introduces two major components, with the most user-facing aspect being Ethereum withdrawals. This allows Ethereum stakers with Lido to directly unstake ETH through the protocol.”
Lido now has a withdrawals page where users can deposit their stETH tokens to get ETH in return.
Following a successful on-chain vote, Lido V2 is officially here.
— Lido (@LidoFinance) May 15, 2023
Lido Staking Withdrawals Live
Lido noted that under normal circumstances, the stETH or wstETH withdrawal period can take anywhere between 1-5 days. Furthermore, the stETH injected back into the protocol will be burnt in order to release the ETH at a 1:1 ratio.
The announcement added that the upgrade lowers a number of previous inconveniences surrounding Lido on Ethereum staking experience. Additionally, it “allows for a more efficient use of Lido’s staked ETH throughout the Ethereum DeFi ecosystem.”
The token unlocks dashboard is projecting a spike in withdrawals on May 16. It reports 45,830 ETH currently in the pending withdrawal queue, which is likely to grow once Lido stakers start withdrawing.
It estimates that almost 7,000 ETH worth around $12.6 million will be withdrawn over the next eleven hours.
Nansen’s dashboard is still reporting that there are more deposits than withdrawals on the Beacon Chain. It also claims a total of 20 million ETH are staked though this is likely to be on the high side since the Beaconcha.in explorer claims 18.3 million.
6,274,752 ETH is staked with @LidoFinance. That’s over 29% of total deposits!
And later today, Lido will enable ETH withdrawals for the very first time
What will happen? Nobody knows, but you can track it here with our dashboard:
— Nansen 🧭 (@nansen_ai) May 15, 2023
V2 also includes an upgrade called a staking router. This new modular component allows for the development of on-ramps for new Node Operators. It promotes staking diversity by allowing solo stakers, DAOs, and Distributed Validator Technology (DVT) clusters.
ETH Price Reaction
Ethereum prices are marginally down on the day, trading at $1,812 at the time of writing. ETH has retreated 13% over the past month as crypto markets continue to correct.
Lido has 29% of all staked Ether, so withdrawals may add some selling pressure to markets in the short term.
Its native LDO token has gained 7.2% on the day, climbing to $2.09 at the time of writing. Furthermore, Lido DAO tokens are up 15% over the past week.