Prominent decentralized finance (DeFi) protocol Lido has announced plans to incorporate non-fungible tokens (NFTs) into its unstaking process. Yesterday, the largest DeFi protocol by total value locked intimated on the plans during its Node Operator Community Call #5. According to Lido, users will receive a transferable NFT that represents their request withdrawal for their staked Ether (ETH). These withdrawals, which are part of the process of users unstaking their ETH, will be enabled after the next Ethereum blockchain upgrade. The popular blockchain is on course to undergo its next major upgrade, dubbed Shanghai, next month.
Breakdown of Lido NFT Unstaking Process
According to Lido product manager Mariya Muzyko, the NFT unstaking process will have two steps: request and claim. The user requests an Ether withdrawal where they can unstake stETH and receive Ether at a 1:1 ratio. The next step sees the user receive a Lido-issued NFT representing the withdrawal request. The Lido user then uses this non-fungible token to claim their Ether rewards, after which the NFT is burned. Lastly, the user redeems and claims their ETH.
Each withdrawal-request NFT is transferable, meaning users can transfer the digital assets to another address. By doing so, these users bestow the new address with the right to claim the corresponding ETH rewards. Alternatively, should a user choose to sell their NFT on secondary markets, Lido will not take a royalty percentage from the sale.
According to the community call, processing withdrawal periods will require approximately one to five days. This withdrawal process will depend on the stETH amount and the number of total requests.
Lido was the first to provide ETH holders looking to stake tokens via stETH issuance with access to liquidity. As a derivative token, stETH represents the user’s initial deposit’s combined value plus accrued interest and is usable across several DeFi platforms.
Lido Received Large ETH Inflow from TRON Founder in February
In late February, Lido experienced a massive inflow of ETH from TRON founder Justin Sun. According to reports, Sun deposited 150,000 ETH worth $240 million into the crypto-staking solution in a single day. That development saw Lido protocol’s total value locked (TVL) jump by more than 2.09% in a day. At the time, a researcher and data analyst said:
“Today [Justin Sun] staked 150K [Ether] through [Lido Finance] (~0.9% of all staked ETH). This is now the highest week by staked amount in almost a year. This is now the largest daily stake inflow for Lido; it also activated Lido’s rate limit feature for the first time.”
A Lido statement also read:
“Lido protocol has registered its largest daily stake inflow so far with over 150,000 ETH staked. Upon reaching this number, a curious (but important) protocol safety feature called Staking Rate Limit was activated”.
Lido DAO has recently gained popularity, rising more than 55% in one week in January.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
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