Celsius, a platform that lends cryptocurrency, has transferred a significant amount of 428,000 stETH (worth approximately $781 million) just as Lido withdrawals became accessible. This move has led to conjecture that Celsius may have plans to engage in staking on its own.
Celcius on Staking Options
Celsius offers staking services to its customers, which involves holding cryptocurrency in a wallet to help with the operations of a blockchain network. Currently, Celsius relies on third-party providers such as Lido for its staking services.
However, the recent transfer of a significant amount of stETH has sparked speculation within the cryptocurrency community that Celsius may be considering moving towards self-staking. This would grant Celsius greater authority over the staking process and the possibility of earning greater rewards.
Major Eth Transfers
According to on-chain data, Celsius recently performed a withdrawal test of 0.1 stETH. Simon Dixon, a Bitcoin pioneer and creditor of Celsius, speculates that this action may imply that Celsius is getting ready to stake directly, bypassing Lido as a middleman. Moreover, Dixon proposes that the withdrawn stETH could serve as loan security for Celsius’ restructuring strategies.
Last week, a smart contract named “Figment ETH2 Beacon Depositor 1” received a transfer of 40,929 ETH from Celsius. On May 12, according to Etherscan, the amount was later sent to the deposit contract of the Ethereum Beacon Chain.
As per Nansen, a company that analyzes blockchain data, Lido currently has 6.27 million ETH worth approximately $11.3 billion. This represents 29% of all staked Ether. Lido recently enabled withdrawals with a staking commission of 10% following a protocol upgrade to V2 on May 15th. Nansen’s data also indicates that there are presently 54,046 ETH in the withdrawal queue, not including the Celsius stash.
What is StETH?
StETH is a type of cryptocurrency that represents a fraction of Ethereum that has been staked or deposited on the Ethereum 2.0 beacon chain. The objective is for each stETH token to have the same value as Ethereum. Despite this, stETH has been traded at a lower value than Ethereum in recent weeks.
It is important to note that stETH is not a stablecoin like Tether or TerraUSD, but instead it acts as an IOU. The primary purpose of stETH is to allow token holders to redeem their tokens for an equivalent amount of Ethereum once the upgrade is finalized.