• Lido Finance, a liquid staking protocol, has introduced a safety measure called Staking Rate Limit to check the number of stakes and mitigate possible side effects.
• The safety valve limits the amount of staked ETH users can mint based on their 24-hour deposit, keeping the refill capacity at 6,200 ETH per hour.
• The Staking Rate Limit applies to all users and is designed to prevent potential issues like reward dilution that might arise from high inflows.
Lido Finance Introduces Staking Rate Limit
Lido Finance is a liquid staking protocol that allows users to stake Ethereum without locking their tokens. Recently, the platform recorded over 150,000 ETH staked in one day leading to concerns about the safety of its platform should such occurrences become regular. Therefore, Lido decided to activate a safety feature known as Staking Rate Limit which will help check the number of stakes and mitigate possible side effects.
Stake ETH Limitation Mechanism
The safety valve limits the amount of staked Ether (stETH) users can mint based on their 24-hour deposit, keeping the refill capacity at 6,200 ETH per hour. Thus, reducing the amount of stake Ether users can mint at any given time based on recent deposits. Additionally, it will replenish block by block meaning that only a limited amount of Ether can be submitted to Lido’s Smart Contracts within a 24-hour interval.
Aim Of Activating The Safety Feature
The main aim behind introducing this feature is to prevent potential issues like reward dilution that might arise from high inflows. By limiting the rate at which new staked ETHs are created and distributed among users, Lido hopes to maintain balance within its network and ensure fair distribution of rewards among its user base.
Benefits Of Using Liquid Staking Platforms
Liquid staking platforms like Lido allow users to earn daily rewards for holding their tokens in wallets without having to lock them up for long periods of time as required by traditional Proof-of-Stake networks. This means that people don’t have worry about being locked out if they need access suddenly or miss certain deadlines when it comes time for token distributions or rewards payouts due since they aren’t tied down by long vesting periods or other stringent requirements often associated with PoS systems.
Conclusion
By activating this safety feature called Stake Rate Limit on its platform, Lido aims to protect its network from potential issues arising from high inflows while also offering users freedom and flexibility when it comes time for them stake their tokens through its liquid staking system.
