"Stake Rate Limit" will help to “respond to large inflows of stake and address possible side-effects."
Lido Finance, a liquid staking protocol for staked assets and Ethereum (ETH), has activated a safety feature called “Staking Rate Limit.”
According to the Twitter thread shared by Lido on February 25th, the feature was activated after the firm recorded “its largest daily stake inflow” of 150,000 Ether (ETH).
Did you know?
Want to get smarter & wealthier with crypto?
Subscribe - We publish new crypto explainer videos every week!
What is Polkadot in Crypto? (DOT Animated Explainer)
Lido staking solution allows investors to stake Ethereum without locking ETH tokens. By depositing their ETH in Lido, customers receive staked Ether (stETH) in return. On top of that, through its staking solution, Lido Finance gives staking rewards to investors for each day they hold tokens in their wallets.
Based on the Twitter thread, the “dynamic mechanism” of the protocol’s safety feature was turned on to “respond to large inflows of stake and address possible side-effects <...>, without the <need> to pause stake deposits explicitly.” In a nutshell, this safety feature ensures that rewards would be distributed successfully.
In one of its tweets, Lido noted that the mechanism limits the amount of stETH that can be minted based on the deposits of the last 24 hours. Lido Finance claimed that the rate of recovery is around 6,200 Ethereum per hour.
Lido highlighted that these limitations will affect “all parties who may try to mint stETH.” The company noted that if customers receive an error stating that “stETH cannot be minted at this time,” they should either try to stake a smaller amount or wait for “capacity to replenish.”
On-chain analyst, dubbed “Lookonchain,” claimed that an advisor at cryptocurrency exchange Huobi, Justin Sun, was the person who staked 150,100 Ether (ETH) worth around $240 million on Lido Finance. The man has reportedly made four deposits, one staking 100 ETH and three stalking 50,000 ETH.
At the time of writing, more than 280,000 investors staked over $9.3 billion worth of crypto assets on Lido Finance.
