The development team behind decentralised finance (DeFi) liquid staking protocol Lido published a proposal about withdrawals that are slated to occur after Ethereum’s Shanghai hard fork — which is planned for launch on March and will be enabling staked withdrawals.
According to the proposal, the Lido protocol must have the ability to unstake a validator in order to provide the withdrawals feature. For Lido’s liquid staking mechanism, incorporating this modification and making stETH redeemable for Ether are essential.
The efficiency, viability, and long-term success of Lido on Ethereum depend on stETH holders’ ability to withdraw their Ether in an equitable and hassle-free manner. The developers added that the process has to be “asynchronous, due to the asynchronous nature of ethereum withdrawals.”
The “turbo” feature and the “bunker” feature are just two of the different withdrawal methods described by the Lido developers. Additional sanctions and slashes will be codified to keep validators from violating the rules. The summary describes how slashings impact a user’s ability to fulfil withdrawal requests.
As the protocol controls about 29% of staked ethereum, Lido is effectively the largest holder of the staked ether supply. With a $8 billion market capitalization, Lido’s STETH ethereum derivative token ranks 13 in the overall cryptocurrency market at time of writing.
