Lido Hits 6 Million ETH in Staking Deposits Post-Shanghai Upgrade
Lido Finance (LDO), the leading staking platform, has surpassed 6 million ETH in deposits, following a significant surge in funds since the Shanghai upgrade.
The Shanghai upgrade on Ethereum not only allowed validators to withdraw their staked assets from 2020 but also spurred a substantial influx of funds back into the blockchain through staking protocols, with Lido Finance standing out prominently.
According to data from Dune Analytics, Lido recorded a remarkable deposit of 105,644 ETH in the past week, equivalent to approximately $199 million. This has brought the total staking deposits on the platform to 6,018,080 ETH. With around 188,000 stakers, Lido is now managing roughly $12 billion in investor assets.
Although Lido remains the leading staking protocol with a 79% market share, it faces increasing competition from emerging rivals like Frax Finance and Rocket Pool. These new entrants collectively attracted $367 million in deposits over the past week, as reported by Nansen.
Lido had previously announced that ETH stakers might not be able to withdraw their funds immediately after Shanghai, but would need to wait until Lido’s own upgrade is rolled out in mid-May. The project's rationale is to ensure the protocol passes security tests, which is a longer wait compared to other platforms like Binance, Coinbase, and Kraken, which began ETH withdrawals just days after Shanghai. This delay also aims to ensure network stability.
Since the Shanghai upgrade concluded on April 13, over 2 million ETH have been withdrawn and reintroduced to the market, according to Beaconcha.in data. High withdrawal traffic at that time led to validators sometimes waiting up to 17 days to retrieve their assets.
Recently, Ethereum has also seen an influx of ETH into staking that outweighs the amount withdrawn. This trend appears to be driven by validators who actively withdraw their staked ETH only to redeposit it into liquid staking protocols for greater liquidity flexibility.
ETH deposit and withdrawal volume as of May 5, 2023. Source: Nansen
