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From April, individuals staking on Lido will receive NFTs as part of its deposit withdrawal process. As such, the decentralized finance (DeFi) protocol intends to issue NFT certificates whenever a user unstakes Ether; these NFTs will be used to claim their ETH tokens.
Through the initiative, holders of the NFTs can transfer them to another address and allow a third party to redeem the rewards, or they can sell the NFTs on secondary marketplaces. In the latter case, Lido will not take any royalty percentage from the sale.
Launched in 2020, Lido is the largest DeFi protocol by total value locked (TVL). The platform was one of the first to offer liquidity to ETH holders through its stETH token. Now, it’s pioneering a new way to redeem staking rewards through non-fungible tokens.
Also, the NFT representing withdrawal request is transferrable so the address receiving NFT could claim ETH instead. One more step, the NFT could be traded on the secondary marketplace 👀
— satBalwyn (@SatBalwynnorth) March 29, 2023
These plans were discussed during the Node Operator Community Call #5 and will take effect once the Ethereum blockchain undergoes the Shangai or Shapella upgrade in April. Lido allows users to stake ETH for stETH at a 1:1 ratio. The token represents the staker’s initial deposit plus the accrued interest.
Withdrawals On Lido Involve Two Steps
According to Mariya Muzyko, product manager at Lido, the process will involve two steps: requesting and claiming.
When a “user requests a withdrawal, they will receive a non-fungible token that represents the withdrawal request.” This NFT will be used to reclaim their staked ETH plus the accrued interest. Once a user redeems the tokens, the NFT will be burned.
That said, Lido notes withdrawal periods will take one to five days and will depend on the amount of stETH being removed, plus the total number of requests being processed at the time.
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*All investment/financial opinions expressed by NFT Plazas are from the personal research and experience of our site moderators and are intended as educational material only. Individuals are required to fully research any product prior to making any kind of investment.
Basil is an avid fan of blockchain technology and all its innovations, and he is passionate about sharing this narrative with his audience. He has spent over five years in the crypto space, specializing in research and creating Web3 content for various media outlets around the globe.
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