Lido activates new ETH staking limit feature
More than 150,000 ETH was staked in a single day on Lido Finance, which then activated one of its safety features. It will introduce a staking rate restriction. The new protocol safety feature is known as the “staking rate restriction.”
The “dynamic mechanism” was engaged once the daily staking limit of 150,000 ether was achieved, as stated in a tweet from the liquid staking protocol that was published on Feb. 25.
Lido discussed the “safety valve” in a related tutorial. It is meant to restrict the amount of staked ether that may be mined during significant inflows. This is done to handle any possibly undesirable impacts, such as rewards dilution.
According to the explanation, this indicates that it is only feasible to send this quantity of ETH to the Lido staking contracts for a duration of 24 hours.
The system works by setting a limitation on the number of ETH that may be mined, which is determined by the amount of ETH that has been deposited over the previous 24 hours. The capacity is replenished at a rate of 6,200 ETH per hour.
According to Lido, it operates by reducing how much total stETH can be mined at any one time per the most recent deposits and then replenishing this potential on a block-by-block basis.
Lido affirms that the mechanism that limits the staking rate will have an effect on any and all parties that may attempt to mint stETH, independent of the method.
Lido staking is gaining popularity
Lido is a method for liquid staking that can be used for digital assets. It gives users the ability to stake ether without requiring them to lock their tokens beforehand. When a user makes a deposit of ETH, Lido offers them a liquid variation known as staked ether (stETH). This kind of coin is recognized for offering customers staking incentives for each day the tokens are kept in their wallets.
By Feb. 27, more than $8.9 billion in ETH have been staked via the protocol, according to Lido Finance’s website, a huge increase from the $5.8 billion announced on Jan. 2. This follows recent news that revealed massive ETH stakes placed by Tron’s founder Justin Sun.
The most recent update from Lido comes as the number of Ethers r staking is said to have increased further in anticipation of the Shanghai upgrade. Midway through March sees the release of the Ethereum Shanghai update, prompting talk of potential effects on the Ether price.
