Liquid staking protocol Lido (LDO) anticipates large withdrawals from Ethereum (stETH) by its users this week following the successful completion of its V2 update.
Withdrawal Request Spikes
According to 21Shares researcher Tom Wan, Lido users have started increasing their withdrawal requests following the successful testing of the feature.
Wan identified a wallet that requested the withdrawal of 6,000 STETH tokens. the dune analytics panel it showed 123 requests to withdraw 13,740 stETH.
This amount is expected to increase significantly, especially when major Lido betting entities start processing withdrawals.
A separate Dune Analytics panel It showed that the protocols have successfully processed 14 withdrawals for 286 ETH.
Celsius moved 428k stETH
Bankrupt Crypto Lender Celsius moved his 428,000 STETH worth $780 million on May 15, prompting speculation that he wants to process a withdrawal from Lido.
At its peak, Celsius would stake its clients’ ETH on Lido for stETH and then use stETH as collateral on DeFi lending platforms like Aave to generate returns. While this was a sound trading strategy in theory, his inability to convert stETH to ETH led to liquidity problems that eventually played a role in his bankruptcy.
With redemptions now possible, several analysts have predicted that the lender could swap its stETH for ETH and use it for its restructuring plan.
Meanwhile, the company has yet to make any major Lido recall requests. However, it has executed a withdrawal of 0.1 stETH.
A Blockworks Westie researcher noted that if Celsius decided to withdraw all of its stETH via Lido validators, it would “contribute around 13k validators and a 7-day queue.”
Lido explained in a May 16 cheep that he was prepared for such large-scale withdrawals. The protocol claimed that it has around 440,000 ETH in its buffers to “soak up” such requests.
Lido post anticipates ‘big withdrawals’ as Ethereum withdrawal requests increase from users who first appeared on CryptoSlate.
