Lido Finance recently underwent an upgrade to its second version, known as “V2,” on the Ethereum network. This made the native governance token of Lido, LDO, increase 10% in value, reaching $2.15 in the past 24 hours.
Lido users can now unstake their stETH and receive ETH at a 1:1 ratio. Most can complete this process within a day, provided that the exit queue on the Beacon chain is empty. However, as reported by the network explorer Rated, it may take up to 5 days and 14 hours for a validator to exit and withdraw from the staking queue.
— Lido (@LidoFinance) February 7, 2023
As part of the unstaking process, users will receive an NFT that represents their withdrawal request. This NFT serves as an intermediate step before claiming their ETH rewards. Once the user claims their rewards, the NFT is burned. Although the NFT can be listed for trading on platforms like Blur and Opensea, Lido marketing lead Kasper Rasmussen clarified that secondary market activity does not impact the withdrawal process.
With nearly 80% market share of liquid staking derivatives on Ethereum, according to blockchain analytics firm Nansen, Lido has already withdrawn over 278,000 ETH at the time of writing. This makes Lido the fourth-largest entity in ETH withdrawals, following major crypto exchanges such as Kraken, Coinbase, and Binance.
Lido emphasised that the new V2 underwent a thorough auditing process, with nine audits conducted by several firms, including Statemind and MixBytes. The audits have been completed, except for one conducted by Oxorio, which is expected to conclude by the end of May.
The transition to v2 is significant as it aims to reduce risks associated with the entire Lido tech stack, as stated by the Vice President of Stanford Blockchain Club, known by the screen name Kydo. Rasmussen added that the recent events demonstrate the ability to enter and exit the staking process, contributing to derisking the experience.