Celsius, a cryptocurrency lending platform, has commenced a significant withdrawal process for hundreds of millions of dollars worth of ether from Lido Finance. This development follows Lido Finance’s recent upgrade, facilitating the withdrawal of staked ether (stETH) tokens. Notably, the withdrawals from Celsius involve substantial funds, with nearly $800 million worth of stETH tokens being moved just hours prior.
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The Recent Developments Following Lido Finance’s Upgrade
As a result of the recent upgrade implemented by Lido Finance, Celsius has promptly initiated the withdrawal process for their stETH tokens. Once the withdrawals are completed, these tokens will be exchanged for the underlying Ethereum (ETH). The upgrade has enabled Celsius to access their staked ether holdings’ value swiftly.
Lido Finance, which charges a 10% staking commission, recently implemented a protocol upgrade to version 2. One of the most notable enhancements introduced by Lido V2 is the ability for Ethereum stakes to withdraw their ETH through the protocol directly. This development aligns with the increasing demand for liquidity and flexibility within the staking ecosystem
Exchange of stETH Tokens for ETH
Upon completing the withdrawal process, Celsius will receive the equivalent value in ETH in exchange for their stETH tokens. This exchange marks the conversion of stETH tokens into their base form of Ethereum.
As part of their staking operations, Celsius transferred 40,928 ETH to a smart contract known as “Figment ETH2 Beacon Depositor 1.” Subsequently, these funds were moved to the Ethereum Beacon Chain deposit contract on May 12, as verified by Etherscan. This transfer underscores Celsius’ engagement with various platforms and protocols in managing their Ethereum holdings.
Withdrawal Requests for 240,000 stETH Tokens
According to blockchain data, Celsius has initiated withdrawal requests for approximately 240,000 stETH tokens, equivalent to roughly $437.7 million at the time of writing. The magnitude of these withdrawal requests emphasizes Celsius’ intention to access a significant portion of their staked ether holdings.
Additional 188,000 stETH Tokens Held by Celsius
In addition to the ongoing withdrawal process, Celsius still retains ownership of an additional 188,000 stETH tokens, valuing approximately $342 million. These remaining tokens allow Celsius to redeem a substantial portion of their investments.
Celsius wastes no time shifting their Ethereum staking tokens away from Lido, the liquid staking platform. Recent transactions on Celsius wallets revealed the movement of a staggering 428,015 stETH tokens, valued at $781 million at the time, to the Lido-staked Ethereum wallet. This significant transfer has sparked speculation that Celsius is preparing for a complete withdrawal.
Utilization of Withdrawn Ether for Restructuring and Creditor Repayment
Simon Dixon, a Bitcoin pioneer, and creditor of Celsius, suggests that the shifting of tokens might be a strategic move by Celsius to stake directly without relying on Lido as an intermediary. Additionally, these tokens could serve as loan collateral, supporting Celsius’ ongoing restructuring plans.
Celsius faced liquidity challenges last year in connection with its ether staking operations. With a substantial debt of $4.7 billion, Celsius aims to leverage the value of their withdrawn ETH to regain stability, repay creditors, and pave the way for a sustainable future.
March Conversion of wBTC Tokens into Bitcoin
In March, Celsius strategically converted wrapped bitcoin (wBTC) tokens into bitcoin, signaling their adaptability and flexibility in managing their crypto assets. This conversion likely aimed to optimize their portfolio and enhance their liquidity position.
Lido’s Prominent Role in Ethereum Staking
Lido Finance currently accounts for a substantial portion of Ethereum staking, with approximately 6.27 million ETH, valued at around $11.3 billion, being staked through their platform. As a trusted player in the industry, Lido has emerged as a go-to platform for users seeking to earn rewards through staking their Ethereum holdings.
Withdrawal Queue and the Impending Celsius Stash
According to on-chain analytics firm Nansen, there is a withdrawal queue of 54,046 ETH. However, this figure still needs to include the significant stash of stETH tokens held by Celsius. The impending withdrawal from Celsius is expected to further contribute to the withdrawal queue and increase the overall liquidity in the staking ecosystem.
Conclusion
Celsius’ recent large-scale withdrawals of ether from Lido Finance signify their proactive approach to managing their crypto assets. The ongoing process of converting stETH tokens into ETH demonstrates their commitment to liquidity and optimizing their financial position. As Celsius takes steps to address their debt and restructure their operations, the crypto community will closely observe the impact of these strategic moves on the platform’s long-term viability and the overall stability of the lending sector.
