Lido DAO Breaks Daily Inflow Record; How ETH Stakers Affected?
Lido DAO Token News: The euphoria around the upcoming Ethereum Shanghai upgrade just got more intense with the huge staking lot by Tron founder Justin Sun. While the staking limit appears to be exhausted and becomes more difficult for the transaction to go through, the Ethereum staking volumes continue to rise as the Shanghai upgrade nears. On Lido protocol, as many as 5.40 million ETH have been staked so far by 167,687 stakers. With the Shanghai upgrade, staked assets can be withdrawn, potentially leading to increased liquidity in the crypto market.
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The upcoming upgrade could likely showcase the real impact from The Merge, which switched Ethereum’s consensus mechanism to proof of stake. This consensus system offers low energy costs as opposed to the previous mechanism of proof of work. It may be recalled that against high expectations, the Ethereum price did not rise after The Merge was completed in mid-September 2022.
Lido Sees Largest Daily Stake Inflow
The Lido protocol had on 25 February, 2023 recorded its largest daily stake inflow so far with over 150,000 ETH staked. This can likely be attributed to Justin Sun’s 150,100 ETH staked. Due to the heavy staking inflow, an important protocol safety feature called Staking Rate Limit was activated. This will lead to some users facing delays in recovering stETH, the Lido team reported. The recent difficulty in recovering stETH may be attributed to the dip in daily trading volume. Compared to $174 million on February 23, 2023, there is a 25% dip in daily volume.
“This protocol safety feature, called the Staking Rate Limit, is a dynamic mechanism to respond to large inflows of stake and address possible side-effects such as rewards dilution, without needing to pause stake deposits explicitly.”
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Meanwhile, the Shanghai upgrade could likely create a ripple effect in the crypto market in terms of liquidity for Ethereum (ETH), Lido Staked ETH (stETH), and Lido DAO (LDO) tokens.
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