staked ethereum

The bankrupt crypto lender wants its huge stash of staked Ether back, but it could be in for a wait.

Bankrupt crypto lending firm Celsius is anxious to get its staked Ether (ETH) stash back from liquid staking platform Lido which enabled withdrawals this week.

Celsius initiated the process of withdrawing its Lido Staked ETH (stETH) from the protocol. According to transaction data it has requested the withdrawal of 428,084 stETH in batches of 1,000.

The stash is valued at approximately $784.7 million at current prices. The move follows a transaction of a similar amount of stETH on May 15 in preparation for withdrawal.

Once the withdrawal process is complete, Celsius will receive the equivalent in Ethereum and the stETH tokens will be burnt by Lido.

According to Dune Analytics, the cumulative amount of stETH in the withdrawal queue is 442,000 from 141 requests. It is valued at around $808 million though Celsius is responsible for the majority of it. The total amount already processed is 629 ETH, according to Dune.

On May 16, Lido stated it had enough ETH in its buffers to absorb the requests.

At time of writing the Lido protocol has ≈440,000 ETH available in the protocol buffers.

There could be large withdrawals this week. If so, some will be absorbed by this surplus.https://t.co/7MfbTuDAFxhttps://t.co/uOOBqsMv5C https://t.co/onrBa7bMhf

— Lido (@LidoFinance) May 16, 2023

However, larger numbers of Ether withdrawal requests from Lido will have an impact on the network withdrawal queue — which is a dynamic process. Lido is the largest staking provider with a market share of almost 30% so Celsius could be in for a long wait to get its ETH back if requests increase.

Related: 3 reasons why Lido DAO price jumped 40% in a week

Research analyst at 21Shares, Tom Wan, suggested that if unstaking requests exceeded 10% it could cause a larger number of validator exits. This would potentially lead to longer queues for withdrawals.

The capital may be used as part of Celsius restructuring efforts or to partly repay some of its $4.7 billion debts to creditors.

In late February, the crypto lender converted 22,962 wrapped Bitcoin (WBTC) into Bitcoin (BTC) in a transaction valued at approximately $540 million at the time.

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The bankrupt crypto lender has been moving its massive stash of staked Ethereum.

It appears that embattled crypto lender Celsius is wasting no time in shifting its Ethereum staking tokens from liquid staking platform Lido, which has just enabled withdrawals.

On May 15, a transaction was identified on Celsius wallets for 428,015 stETH (Lido staked Ether) to the Lido staked Ethereum wallet. The whopping stash was worth $781 million at the time of transfer, which some believe is in preparation for withdrawal.

On-chain data points to Celsius performing a test withdrawal of 0.1 stETH a few hours later.

According to Bitcoin pioneer and Celsius creditor Simon Dixon, Celsius could be “lining up for staking directly without Lido in the middle.” It could also be loan collateral for Celsius restructuring plans, he added.

428k #Celsius $stETH on the move - likely lining up for staking directly without #LIDO in the middle. That’s the loan collateral proposed for NewCo. Should get an update during court hearing this week - 17th May - No court approval needed for this it seems https://t.co/pwT4fR1Qjt https://t.co/4tdSsMegA8

— Simon Dixon (@SimonDixonTwitt) May 15, 2023

Blockchain intelligence firm Arkham Intelligence highlighted that Celsius transferred 40,928 ETH last week to a smart contract called “Figment ETH2 Beacon Depositor 1”. This was then moved to the Ethereum Beacon Chain deposit contract on May 12, according to Etherscan.

Related: Celsius creditors demand transparency on ‘suspicious’ FTX transactions

Lido, which takes a 10% staking commission, enabled withdrawals on May 15 with a protocol upgrade to V2.

“Lido V2 introduces two major components, with the most user-facing aspect being Ethereum withdrawals. This allows Ethereum stakers with Lido to directly unstake ETH through the protocol.”

Lido currently accounts for 29% of all staked Ether (ETH) — 6.27 million ETH valued at around $11.3 billion.

Meanwhile, there is 54,046 ETH currently in the withdrawal queue, and this doesn’t include the Celsius stash yet, according to on-chain analytics firm Nansen.

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