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Only 0.42% Processed So Far

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

The latest data suggest that only 0.42% of the withdrawals have been processed so far.

Aftermath of V2 Upgrade

According to Switzerland-based 21Shares’ estimates, Lido Finance currently owns 31% of the total ETH staked. There are around 6.7 million stETH in supply. Of which, 448.04k stETH has been sent to Lido for request withdrawals.

Celsius Network, the insolvent CeFi lender, accounts for the vast majority with approximately 448.04 stETH in withdrawal requests, as per on-chain analytics provider, Dune.

Meanwhile, Lido has 470k ETH Buffer for handling the withdrawals which come from execution layer reward (Priority Fees/MEV), partial withdrawals, as well as daily ETH deposits from new stakers through the staking platform. With only 0.42% of the withdrawals processed so far, the analysis by 21Shares noted that Lido may not require to exit any validator from the network to honor all the withdrawals.

“With the current amount of $stETH requested to withdraw, Lido will not need to exit any validator from the network to honor all the withdrawals and still have 20k $ETH left as a buffer.”

Lido Finance Activating Withdrawals

Lido Finance, which has over $12.41 billion in total value locked (TVL), deployed its v2 iteration on May 15th. This move was made through an on-chain vote, with the community members deliberating over the proposal.

The upgrade, which includes reduced gas fees and enhanced security measures, comes a month after the Shapella hard fork that allowed staking validators to withdraw Ether. Lido’s V2 underwent nine total audits from several firms, such as Statemind and MixBytes.

Celsius, on the other hand, unstaked the $779 million of ETH it had with the liquid staking derivatives protocol. The fund movement by the beleaguered crypto lender was speculated to be used as part of its restructuring and creditor repayment efforts.

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