Lido Goes Live with V2, Unlocking ETH Withdrawal Options for Stakers

Lido has upgraded to version 2 on Ethereum, enabling users to unstake their stETH and withdraw ETH in a 1:1 ratio. This has led to a 10% increase in the value of LDO, the platform's native token. The upgrade, which has undergone nine audits, allows users to receive an NFT as an intermediate step during the unstaking process. Lido, which commands nearly 80% market share in liquid staking derivatives on Ethereum, has already withdrawn over 278,000 ETH, making it the fourth-largest entity by ETH withdrawals. The upgrade is considered significant as it reduces risks associated with the platform's technology and enhances the user experience for staking and unstaking.

Lido Upgrades to Version 2, Enabling Ethereum Stakers to Withdraw ETH

Ethereum-based decentralized liquid staking protocol Lido Finance has successfully upgraded to its second iteration, Lido V2, bringing significant advancements and enhanced functionality for its users.

Following the deployment on Monday, Lido's native governance token, LDO, has surged by 10%, reaching a price of $2.15, as per CoinDesk data.

The V2 upgrade introduces a groundbreaking feature: the ability for users to unstake their staked ETH (stETH) and receive ETH at a 1:1 ratio. This process typically takes approximately one day, provided there is no backlog in the Beacon chain exit queue. However, the maximum withdrawal time is capped at 5 days and 14 hours, according to data from Rated, a network explorer.

To facilitate the unstaking process, users receive a Lido-issued Non-Fungible Token (NFT) as an intermediary step. Upon requesting to unstake, users obtain an NFT representing their withdrawal request. Subsequently, they utilize this NFT to claim their ETH rewards, and the NFT is subsequently burned.

Despite the potential for NFT trading on marketplaces such as Blur and Opensea, Lido Marketing Lead Kasper Rasmussen emphasized that "secondary market activity does not play a role in the withdrawal process."

Lido currently dominates the Ethereum liquid staking derivatives market with an estimated 80% market share, as reported by blockchain analytics firm Nansen. At press time, Lido has already processed over 278,000 ETH withdrawals, placing it as the fourth largest entity in terms of ETH withdrawals, behind major crypto exchanges Kraken, Coinbase, and Binance.

The V2 upgrade has undergone extensive security assessments, with nine total audits performed by reputable firms including Statemind and MixBytes. All audits have been completed, except for one by Oxorio, which is expected to conclude by the end of May.

"The transition to V2 is crucial as it 'derisks the entire Lido tech stack'," explained Kydo, Vice President of Stanford Blockchain Club. "Today's developments demonstrate that users can seamlessly enter and withdraw from the staking environment, which inevitably reduces the risks associated with the staking process," added Rasmussen.

Lido's V2 upgrade represents a significant milestone for the Ethereum ecosystem, empowering users with greater flexibility and control over their staked assets. It is anticipated that the enhanced functionalities and improved security measures will further solidify Lido's position as a leading liquid staking platform within the rapidly evolving crypto landscape.