On the evening of February 25, Lido announced that it had recorded a record inflow of money into the protocol within 1 day. At the same time, this liquid staking platform also announced the activation of Emergency Safe mode.
On its official Twitter, Lido announced a record 150,000 ETH staked into the protocol in just 1 day.
Lido protocol has registered its largest daily stake inflow so far with over 150,000 ETH staked. 🎉
Upon reaching this number, a curious (but important) protocol safety feature called Staking Rate Limit was activated.
Here’s how it works🧵👇 pic.twitter.com/ngBtWz7q18
— Lido (@LidoFinance) February 25, 2023
Notably, many on-chain data analysis units said that most of this ETH was staked from the wallet labeled Justin Sun – founder of Tron.
Justin Sun staked 150,100 $ETH($240M) on @LidoFinance just now.https://t.co/VbqAnBqojA pic.twitter.com/QieWaJkmHY
— Lookonchain (@lookonchain) February 25, 2023
This move attracts the attention of the community, especially as the Ethereum network is approaching the Shanghai upgrade milestone (scheduled for March 2023). The fact that a large amount of ETH is staked into the protocol also led Lido to activate the “Stake Rate Limit” – a feature that minimizes the impact of large capital flows into the platform.
It works by decreasing how much total stETH can be minted at any one time based on recent deposits (sliding 24h window), and then replenishing this capacity on a block-by-block basis. Due to the rate of recovery (~6.2K ETH/hr), most users are unlikely to be affected.
— Lido (@LidoFinance) February 25, 2023
Explaining how this safety feature works, Lido says it will reduce the amount of stETH being minted for a specific period of time (usually the 24-hour range). This limit will be gradually loosened after each block, corresponding to 6,200 ETH / hour.
The initial limit is 150,000 ETH and this parameter will be selected by the voting protocol in advance.
Then, when the user stakes ETH in Lido, the “free capacity” (corresponding to the remaining available limit) will decrease, and the “blocked-capacity” (corresponding to the amount of staked ETH) will increase. In the event of this normal operation, stETH will be minted 1:1 with the amount of ETH staked.
However, in an emergency when the amount of ETH exceeds the limit of 150,000 ETH (as mentioned at the beginning of the post), the protocol will apply a reducer, breaking the ETH into pieces and minting stETH at a low rate. than.
And after waiting, this amount of ETH will be staked into Ethereum’s Beacon Chain network. This emergency safety mode will keep the network working properly, ensuring that the staking reward is not diluted, even if there is a sudden large position in the protocol.
Synthetic Kyptos
