Justin Sun, co-founder of Tron, withdrew 30,000 ETH, worth approximately $56 million, through two addresses via Lido, a liquidity staking service provider, on July 10, Lookonchain reveals. After his move, his stake in Ethereum via Lido dropped to 263,294 ETH, or $491.6 million at spot rates.
Justin Sun stops participating in Ethereum
Lookonchain, a blockchain analytics platform, notes that between February 25-27, Sun bet 288,100 ETH, or $538 million, and won 5,194 ETH, or $9 million. This translates to average daily earnings of 38 ETH, or $72,000, based on the annualized percentage yield (APY) of around 4.87% offered by Lido on Ethereum participants.
The reasons behind Sun’s withdrawal of 30,000 ETH from Lido are unclear. You could indicate your intention to sell some of the ETH, transfer it to a different staking platform, or even run your private Ethereum validation node.
Despite this transfer, Sun remains one of the largest participants in Lido, accounting for over 9% of the total ETH staked. While Sun’s decision not to stake and transfer coins may be cause for concern, ETH prices are firm as of writing on July 10 and are approaching $1,900.
Contrary to fears ahead of the Shanghai update in mid-April, the number of users staking on ETH continues to rise. trackers show that more than 21 million ETH have been locked by more than 657,000 validators as of July 10.
With the Shanghai update implemented, ETH holders who have staked at least 32 ETH on the Beacon Chain since December 2020 can withdraw their assets. Despite previous fears that more coins will be withdrawn and sold on spot markets, affecting ETH prices, more validators and more coins have been blocked on Beacon Chain and other staking solutions.
Will the SEC dampen coin staking?
Lido, the leading ETH staking provider, is the largest decentralized finance (DeFi) protocol by total value locked (TVL), according to DeFillama. As of July 10, Lido was managing over $14.6 billion in assets, the majority of which are ETH.
More than $14.5 billion of ETH has been delegated and locked through the Lido infrastructure. On Lido, users can stake ETH and other supported currencies without the need for lock-up periods or high requirements, making it an attractive option for some investors.
In lawsuits filed against cryptocurrency exchanges Binance and Coinbase in early June, the United States Securities and Exchange Commission (SEC) alleged that some proof-of-stake coins, including Cardano’s ADA and Algorand’s ALGO, were unregistered securities.
After this assessment, its prices plummeted, even affecting ETH. This is partly because Ethereum is now a proof-of-stake network after moving from a proof-of-work algorithm and uses the same consensus system used by competing smart contract platforms accused of issuing unrecorded securities. The situation is exacerbated by the fact that Gary Gensler does not clarify whether ETH is a utility like Bitcoin.
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