Lido reveals plans to facilitate NFT withdrawals using ETH withdrawal requests

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 hinted at its plans during the Node Operator Community Call #5. According to Lido, users will receive a transferable NFT representing their request withdrawal for their stake Ether (ETH). These withdrawals, which are part of the process of users withdrawing their ETH, will be enabled after the next Ethereum blockchain upgrade. The popular blockchain is set to undergo its next major upgrade, dubbed Shanghai, next month.

Breakdown of the Lido NFT Unstaking Process

According to Lido product manager Mariya Muzyko, the NFT issuance process will have two stages: request and claim. The user requests an Ether withdrawal where they can withdraw 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. Finally, 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 this, these users give the new address the right to claim the corresponding ETH rewards. Alternatively, if a user chooses to sell their NFT on secondary markets, Lido will not take a royalty percentage from the sale.

According to the community solicitation, the processing of the cancellation periods will require approximately one to five days. This withdrawal process will depend on the amount of stETH and the number of total requests.

Lido was the first to provide ETH holders who wish to stake tokens via stETH issuance with access to liquidity. As a derivative token, stETH represents the user’s initial deposit’s total value plus accrued interest and can be used on multiple DeFi platforms.

Lido received Large ETH input from TRON founder in February

In late February, Lido experienced a massive influx 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. This development caused Lido Protocol’s Total Value Locked (TVL) to jump by more than 2.09% in a day. At the time, a researcher and data analyst said:

“Today [Justin Sun] bet 150K [Ether] through [Lido Finance] (~0.9% of all staked ETH). This is now the highest week measured in effort in almost a year. This is now the biggest daily effort for Lido; it also enabled Lido’s rate limit feature for the first time.”

A Lido statement also read:

“The Lido protocol has recorded its largest daily staking inflow so far with over 150,000 ETH staked. After reaching this number, a strange (but important) protocol security feature called Staking Rate Limit was activated”.

Lido DAO has recently gained popularity, rising more than 55% in one week in January.

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