Lido Finance prepares upgrade – Ethereum Staking also affected
Originally posted here.
By: Stephan Fiedler
Lido Finance is known as the largest staking platform in the crypto industry with a focus on Ethereum. Now it is preparing for a major […]
Lido Finance is known as the largest staking platform in the crypto industry with a focus on Ethereum. Now it is preparing for a major upgrade, also with a view to ETH, where unstaking is to become possible from March.
As of early January, Lido Finance is the crypto industry’s most capitalized DeFi protocol, with more than 90 percent of its capital under management coming from Ethereum (ETH) staking. Now, via blog post , Lido Finance has released its plans for a major upgrade, which already take into account the Shanghai on Ethereum update announced for March. With Shanghai at ETH, it should finally be possible to withdraw Ethereum from staking again. ETH have been staking since the end of 2020, but the unstaking option is only coming now that the protocol change on Ethereum has been handled by “The Merge”.
Lido Finance has scored with issuing a wrapped token called sETH to customers for staked Ethereum, which is accepted in many DeFi markets. However, when Shanghai goes live in March as planned, “real” ETH can again be withdrawn from the staking pool. Here, Lido Finance wants to organize with two different modes “Turbo” and “Bunker” for a fair and transparent sequence, but details are pending with which fees the “Turbo” mode comes up with. Lido Finance organizes the staking of Ethereum currently worth around $8.6 billion, which represents just under a third of all ETH staked. How Lido Finance strategically positions itself to unstake Ethereum is therefore closely watched.
Lido Finance’s second major plan for its version 2 is to make the network more decentralized. Through a module called “Staking Router,” Lido Finance aims to make it much easier to dock on the network as a “Super Node” that can validate transactions and earn fees for doing so. Currently, Lido Finance has 30 such nodes approved and plans to increase the number to strengthen decentralization.
Conclusion: Lido Finance strengthens self-governance
In concept, Lido Finance is a self-governing project, and the Lido DAO Token (LDO) serves as a ballot in strategic directional decisions. So before Lido Finance version 2 launches, it must also be given the green light via referendum. A date for the vote is to be set once the proposed update has passed security checks. Meanwhile, the most important question for many investors remains how Lido Finance will deal with the upcoming unstaking of ETH. However, Ethereum has yet to provide any information on this, for example, whether they would like to stretch out the unstaking in order to reduce the impact on the price curve of ETH.
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