Liquid staking protocol Lido Finance is set to enable withdrawals for the first time next week

In a Twitter update on Monday, the Lido Team said that if all goes as planned in an on-chain governance vote this Friday, the highly anticipated Version 2 (V2) of the platform would go live on May 15. 

With V2 comes the ability for ETH stakers to withdraw funds directly from the protocol – something that has not been available since the platform went live a few weeks after the Beacon Chain launch in December 2020.

Lido enables users to stake less than the required 32 ETH threshold with a tokenized asset called staked ETH (stETH) serving as a placeholder for locked assets. The platform is now the largest DeFi protocol with over $11.96 billion in Total Value Locked (TVL), more than 98% of which is on Ethereum.

After the upgrade, more than 270,000 ETH will be available for withdrawal, which Lido expects will speed up the process in the queue to exit. For a staker with under 1000 stETH, Lido estimates that withdrawal requests should take less than a day to complete. However, for those that seek withdrawals of more than 100,000 ETH, the process could take up to two weeks.

The Shapella Upgrade on April 12 enabled validator withdrawals on the Ethereum staking contract. While 2.4 million ETH has been withdrawn so far, the ability to withdraw has also made staking less risky, leading to an influx of deposits which has outpaced withdrawals over the last few weeks.

Users staking through Lido Finance accounted for the majority of staking deposits, with 6.1 million ETH deposited on the contract, according to data from Nansen.