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TRON founder Justin Sun has applied to withdraw 52,905 ETH, worth $209 million, from Lido Finance. Historical data says this may affect Ethereum prices.
The withdrawal was part of a larger Ethereum (Ethereum) The accumulation strategy in which Sun allegedly purchased 392,474 ETH at an average price of $3,027, now showing an estimated profit of $349 million.
This is not the first time that Sun has withdrawn large amounts of ETH. On October 4, 2023, Sun withdrew 80,253 uncollateralized ETH, coming with about $131 million from Lido, and transferred it to Binance within four days, around mid-October. Soon after, a 5% decline in Ethereum prices was observed. Analysts wonder whether Sun will use something similar when withdrawn assets are “delivered” to exchanges for a potential sale.
The $209 million withdrawn from Lido Finance is noteworthy because it underscores just how important Lido is to Ethereum. Proof of stake Infrastructure. As a liquid storage protocol, Lido solves the problems of traditional staking, inaccessibility of resources, and illiquidity by allowing users to stake ETH and remain liquid with tokens in circulation.
Lido It enables more than 30% of the total ETH accumulated on the network, making it one of the cornerstones of Ethereum’s Proof of Stake mechanism. Large withdrawals e.g Justin Suns withdrawal raises questions about betting on liquidity and potential market impacts. Although Lido Staking the questioner The solution makes tokens more accessible, but the fear of large-scale sudden withdrawals exposes a serious weakness in staking protocols. Such moves could raise fears of reduced liquidity. One such incident can be traced back to August 5 of this year, when withdrawals, possibly by whales, sent the price of ETH falling from $3,317 to $2,419.
Although Lido withdrawals are not instantaneous, since they have to go through the signature queue on Ethereum, such large movements can be an indicator of market changes, especially if several large stakeholders follow suit, causing an imbalance. Between mortgaged and unencumbered assets.
Aside from withdrawing ETH, Sun deposited EIGEN worth $964,000 into HTX, a cryptocurrency exchange. ign (king) is the native working token of EigenLayer, a protocol that enhances blockchain security by allowing guarantees against self-errors to be re-arranged. This deposit also indicates that it aims to diversify liquidity across tokens and other high-risk tokens that it may hold.
