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Lido to level up before Ethereum Shanghai hard fork upgrade

Lido to level up before Ethereum Shanghai hard fork upgrade

Rules for liquid wagering Lido shows its plans for the v2 upgrade, which will allow stETH withdrawals and put Staking Router architecture into place.

The main points of the proposed upgrade are the launch of a new Staking Router by Lido and the ability for $1,655 stakers to withdraw funds.

The Staking Router has a modular architecture that allows new node operators, like solo stakers, decentralized autonomous organizations (DAOs), and distributed validator technology clusters, to connect to the network. With this last method, several nodes can share the role of validator.

Lido is expected to become an extendable protocol because the Staking Router is made up of separate parts. Validator modules will be seen as groups of validator pools that can act as a protocol supplier. Modules will take care of an internal operator register, store validator keys, and give stakes and rewards to operators.

With the introduction of liquid staking rewards withdrawals, Lido Staked ETH (stETH) holders can now withdraw cash in exchange for ETH at a 1:1 ratio. According to a summary of the upgrade that was given to Cointelegraph, the withdrawals function also reduces risks on the secondary market, which is expected to go live after Ethereum’s Shanghai upgrade.

Users who want to withdraw ETH will have to go through a procedure called “claim and request.” Users will have to lock stETH before they can make a withdrawal. The protocol then locks the ETH, burns the locked stETH, and marks the request as claimable so that the user can get their ETH back.

A short timeline shows the development milestones that will be reached from February to April 2023. During this time, code will be tested on the Goerli Testnet before the ceremony and upgrade to withdraw credentials.

There is a difference between Lido protocol validators that use BLS-based “0x00” signatures and those that use smart-contract-based “0x01” signatures. This means that withdrawal credentials need to be changed from time to time.

Lido wants to change the credentials by having a DAO ceremony where people sign a message about the rotation, which is then sent to the consensus layer network.

As was already said, the upcoming Ethereum Shanghai update has made Lido Financial the largest decentralized finance protocol, with over $8 billion of value pledged on its platform through 2023.

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MahKa loves exploring the decentralized world. She writes about NFTs, the metaverse, Web3 and similar topics.

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