Victim of its success? The staking platform Lido Finance had to limit Ether (ETH) deposits, following an influx of 150,000 ETH. And the culprit is none other than Justin Sun, the founder of Tron (TRX). Here’s a look back at the massive transfer that caused this event.
Lido Finance limits its staking services
The news was announced over the weekend by Lido Finance, which announced the largest ETH staking deposit in its history. It is 150,000 ethers that have been transferred in several times, or $245 million at the current price. The protocol was therefore forced to implement a security measure called “Staking Rate Limit”.
As a reminder, the point of Lido Finance is that the platform allows ETH to be staked by receiving an equivalent, in order to bypass the asset lock. Users deposit their ETH, and get stETH in exchange. The security measure in place therefore dynamically limits the stETH that can be produced (mint).
Only 150,000 ETH can be submitted to the Lido contract in a 24-hour period. The measure avoids some negative effects, including the dilution of rewards:
“This works by reducing the total number of stETH that can be produced at any one time, based on recent deposits. This capacity is then gradually reopened, block by block. “
Justin Sun behind this record
According to Lookonchain analysis, the record deposit came from a single user, who made three consecutive 50,000 ETH transfers. And that user would be none other than Justin Sun, the controversial founder of Tron (TRX):
Justin Sun staked 150,100 $ETH($240M) on @LidoFinance just now.https://t.co/VbqAnBqojA pic.twitter.com/QieWaJkmHY
– Lookonchain (@lookonchain) February 25, 2023
The move was also reported by the tracker WhaleAlert, which had noted the transfers from Justin Sun’s wallet. The creator of Tron would therefore be solely responsible for this security adjustment by Lido Finance.
In recent weeks, we have seen a rise in liquid staking protocols, such as Lido Finance. The reason for this is the Shanghai update that Ethereum will soon be making. This will allow users to withdraw ETH sent on the Beacon Chain. The liquid staking protocols, which greatly simplify the staking of ETH, are therefore particularly scrutinised.
Justin Sun is clearly very bullish on the future of Ethereum, and staking in particular. And he’s not alone: Lido is currently the leading DeFi protocol in terms of total value locked in, with over $9 billion in assets.
