- Lido Finance has unveiled version 2 of its protocol. It will decentralize the protocol and allow for the withdrawal of staked ETH.
- Users can withdraw their staked ETH using one of two modes, Turbo or Bunker.
- The proposals would first be voted on before developers begin trying out the upgrades.
Lido Finance, the market’s largest decentralized liquid staking platform for Ethereum, has unveiled version 2 of its protocol which launched with new upgrades in preparation for the much-anticipated Shanghai update.
Lido Finance Introduces V2 Protocol
In a blog post on Tuesday, February 7th, Lido Finance unveiled the protocol’s latest upgrade, Lido V2, which focuses on withdrawing Ethereum (ETH) and decentralizing its validators.
Although the upgrade, which Lido Finance calls its largest upgrade to date, has been completed on the protocol, the Lido V2 must still be approved by its decentralized autonomous organization (DAO) before it can be fully deployed.
New Features are Coming to Lido
Lido V2 hopes to introduce two new key features to the staking protocol by including two proposals. First is the most anticipated feature — the withdrawal proposal to give users the ability to unstake locked Ethereum on the platform.
Lido is Ethereum’s biggest decentralized staking pool, with over 128,858 ETH coins locked on the platform. While a minimum of 32 ETH is required to stake on the blockchain, Lido allows users to stake any amount of ETH in exchange for staked ETH (stETH)
This allows everyone to earn a yield on their Ether coins. According to Lido’s blog post, users can withdraw their ETH on the platform using Turbo and Bunker.
This will be the default unstaking and withdrawal mode for staked ETH. In this mode, Lido will process withdrawal requests quickly and use all the available ETH collected from deposits and rewards.
This is a fail-safe mode if the protocol experiences high network activity or an unforeseen “catastrophic” event.
Lido says this mode will prevent “sophisticated actors from gaining an unfair advantage against other stakers by delaying withdrawals in the whole protocol.”
Decentralizing the Lido Finance Protocol
The second proposal, a staking router Lido’s Version 2.0, will assign staking to selected validators to decentralize the network. Currently, there’s only one router on Lido version 1.
The proposal will allow users to be able to propose adding a new router to receive staking requirements. This will allow a wider range of node operators to participate in the Lido protocol.
As a result of the news, Lido Finance’s native protocol token, LDO jumped as much as 14% to reach a weekly high of $2.68.
The 24-hour price chart for Lido (LDO). Source: CoinMarketCap
On the Flipside
- The Lido community will now vote on these two proposals before the protocol developers can begin a test trial for them.
Why You Should Care
Lido’s proposed upgrade aims to follow closely the timeline of Ethereum’s Shanghai upgrade to allow its users to withdraw their staked ETH without a problem.
Read about Lido’s dominance in:
Lido Finance (LDO) Ranked First by TVL Among DeFi Protocols
Read more on the Shanghai upgrade below:
Shanghai Anticipation Builds as Ethereum Surpasses 500,000 Validators