When it comes to Ethereum staking protocols, Lido Finance is by far the most popular, and it just got an update to version 2.
With the release of version 2, Lido Finance, Ethereum’s most popular liquid staking technology, now allows users to withdraw ether.
The community members deliberated and voted on the idea to upgrade to version 2 on the blockchain. The Aragon platform recently confirmed governance vote 156, which was first held on May 12.
The key feature of Lido V2 is the ability to withdraw staked ether (stETH) at a 1:1 ratio for liquid staking users.
Lido Finance offers a forked version of ether (ETH) called staked ether. Users that deposit ETH get staked ether (stETH), a token that frees up the funds and may be used as collateral in further DeFi initiatives. There are now around 6.1 million ether (ETH) staked on Ethereum using Lido, with a total market value of almost $12 billion.
The initial purpose of Lido was to facilitate the processing of individual ETH withdrawals from a “withdrawals vault” in a more timely manner. To prevent a time-consuming procedure of leaving validators, the 270,000 ETH ($490 million) now stored in the Lido V2 upgrade’s vault will be immediately ready to meet withdrawal requests.
According to Nansen statistics, insolvent lender Celsius controls almost $720 million worth of stETH (ether) via Lido Finance, making this upgrade particularly important for Celsius. Due to financial difficulties last year, Celsius had trouble converting its stETH holdings back to ETH in order to meet withdrawal demands from their customers. With the launch of withdrawals on Lido, users will have the opportunity to retrieve their ETH and maybe have their withdrawal requests met.