Lido rallies 12% as it enables staked Ethereum withdrawals

Liquid staking protocol Lido (LDO) will finally enable staked Ethereum (ETH) withdrawals after its community-supported enacting of the V2 upgrade.

The protocol announced this development on May 15, saying final checks were occurring and users should stay tuned.

Voting for the upgrade started on May 12 and met no resistance as all the 59.5 million tokens involved in the votes supported the upgrade.

Lido V2 upgrade

The Lido V2 upgrade would allow users of the decentralized staking protocol to withdraw locked staked ETH on the platform. Although the upgrade was completed in February, it required DAO approval before it could be fully deployed on the Ethereum mainnet.

“The implementation of withdrawals coupled with the Staking Router proposal will contribute to an increase in the decentralization of the network, a more healthy Lido protocol, and enable the long-awaited ability to stake and unstake at will, reinforcing stETH as the most composable and useful asset on Ethereum.”

The V2 upgrade will further decentralize the protocol by introducing the Staking Router. This is a controller contract that will enable more node operators and more diverse validator sets through the introduction of additional modules.

Several crypto analysts have predicted that the upgrade could lead to a reshuffling amongst multiple liquid staking protocols. Tangy noted that the withdrawals could also lead to “a continuous gradual rise in total staked Ether as the deposit cue is already filled 2 weeks out with no withdrawal cue.”

Meanwhile, Lido is currently the dominant liquid staking protocol, with over 6.2 million ETH staked through its platform. According to Nansen’s dashboard, it controls 79.5% of the liquid staking market.

$7k ETH withdrawn

Blockchain analytical firm Arkham Intelligence reported that roughly 3.6 ETH — roughly $7000 — have been withdrawn since Lido enabled withdrawal on its platform.

The firm added:

“We hope these unprecedented events do not have an adverse market impact.”

Meanwhile, a Lido protocol developer, pshe.eth, said someone front-ran the exec transaction to get the first Lido Withdrawal NFT.

LDO is up 12%

Following the news, Lido’s LDO token rose by roughly 12% in the last 24 hours to trade at $2.16253 as of press time, according to CryptoSlate’s data.

The LDO token has enjoyed some upside over the past week, rising by 26%. However, its value is down 15% since the Shappella upgrade was enabled, and the total value of assets locked on the protocol shrunk by 2% compared to its rivals like Frax Ether and Rocket Pool (RPL) which both recorded double-digit gains, according to DeFillama data.