February 21, 2024



Troubled crypto lending firm Celsius is scrambling to remove its collateralized ETH (stETH) tokens from liquidity collateral platform Lido.

Lido just enabled withdrawals, and Celsius may have to wait a long time to get their staked ETH.

celsius fast moving

At current prices, Celsius’ collateralized ETH assets are worth approximately $784 million. On May 15, eagle-eyed observers spotted a transaction on Celsius Wallet, staking approximately 428,015 ETH to a Lido-collateralized ETH wallet.

“428k #Celsius $stETH on the move – probably queued straight to pledge with no #LIDO in between. That’s the proposed loan collateral for NewCo. Should be updated at this week’s court hearing – May 17 Day – no court approval appears to be required.”

Now Celsius has initiated the process of withdrawing its stash from the agreement. According to data from Etherscan, Celsius has requested to withdraw approximately 428,984 stETH. Withdrawals will be made in batches of 1000. Blockchain intelligence firm Arkham Intelligence has said that Celsius has transferred nearly 41,000 ETH into a smart contract called “Figment ETH2 Beacon Depositor 1,” which was then transferred to the Ethereum Beacon Chain deposit contract.

Lido enabled withdrawals via a protocol upgrade on May 15th. The company added in a statement,

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

Lido accounts for nearly 29% of all collateralized ETH, worth over $11 billion.

Growing queue for withdrawals

After the withdrawal process is complete, Celsius will receive an equivalent amount of ETH, and Lido will destroy the corresponding pledged ETH tokens. According to Dune Analytics, the amount of stETH waiting to be withdrawn is steadily increasing, with 141 requests currently at 442,000.The value of tokens awaiting withdrawal is approximately $808 million, of which Celsius Responsible for the majority of stETH in the withdrawal queue. According to Dune, the total amount that has been processed so far is 1858 ETH.

Lido added that it has enough ETH in its buffer to handle a wave of withdrawal requests. The Liquid Staking protocol updated users via its Twitter account, stating:

“At the time of writing, there is about 440,000 ETH available in the protocol buffer of the Lido protocol. There may be a large number of withdrawals this week. If so, some people will be absorbed by this surplus.”

long wait celsius

In view of the large number of Lido’s ETH withdrawal requests, it is expected to have a certain impact on the network withdrawal queue. With nearly 30% market share, Lido is the largest staking provider. This means that Celsius could face long waits to get access to its stash of ETH if requests continue to increase.

According to Tom Wan, a research analyst at 21Share, if more than 10% of staking requests are canceled, it could cause a large number of validators to quit and lead to longer withdrawal queues.It is speculated that Celsius Capital can be used as part of a restructuring exercise or to pay off part of debt. Celsius About $4.7 billion is owed to creditors.

Disclaimer: This article is for informational purposes only. It does not provide or be intended to be used as legal, tax, investment, financial or other advice.