1. PixelPlaygroundHome
  2. Metaverse Insights

Lido’s Dynamic Pledge Mechanism Responds to High Pledge Inflow

• Metaverse Insights • 110 views

On February 25, Lido, the liquidity pledge agreement, announced that the number of pledge ETHs flowing into its platform today exceeded 150000, setting the hig…

Lidos Dynamic Pledge Mechanism Responds to High Pledge Inflow

On February 25, Lido, the liquidity pledge agreement, announced that the number of pledge ETHs flowing into its platform today exceeded 150000, setting the highest daily pledge flow so far. However, after reaching this number, the platform triggered the security limit function “Staking Rate Limit”. This function is a dynamic mechanism, which can respond to the problem of dilution of pledge rewards due to the inflow of large flow of pledge tokens without suspending pledge deposits, but will reduce the number of cast stETH and then gradually supplement it.

Lido: The highest daily pledge flow has been set today, and the “Staking Rate Limit” limit has been triggered

Interpretation of the news:


Lido, the liquidity pledge platform, announced that it has achieved a record-high daily pledge flow, with more than 150000 ETHs flowing into the platform on February 25. However, the platform also triggered its security limit function, which is designed to address the issue of dilution of pledge rewards when there is a large inflow of pledge tokens.

The security limit function, called “Staking Rate Limit,” is a dynamic mechanism that responds to high pledge inflow without suspending pledge deposits. Instead, it reduces the number of cast stETH, a form of tokenized Ethereum that users receive in exchange for their pledge tokens. This gradual reduction will help sustain the pledge rewards and ensure that they are not diluted.

This announcement highlights the importance of having a dynamic mechanism in place to manage pledge inflow for liquidity pledge platforms like Lido. Without such a mechanism, the influx of new pledge tokens could dilute the rewards, which in turn could discourage users from participating in the platform. Therefore, having a mechanism that can dynamically adjust to new pledge inflows is crucial to maintaining the health and sustainability of the platform.

Moreover, the fact that Lido was able to achieve its highest daily pledge flow despite triggering the Staking Rate Limit function shows the platform’s ability to handle high volumes of transactions and adjust accordingly. This sends a positive signal to users and investors that Lido is a reliable and robust platform that can scale to meet growing demand.

In summary, Lido’s announcement about its record-high daily pledge flow and the activation of its dynamic security limit function showcases the importance of having mechanisms that can respond to changing market conditions. This not only protects the rewards of existing pledge token holders but also ensures the long-term sustainability of the platform. As such, dynamic mechanisms like the Staking Rate Limit function are essential for liquidity pledge platforms to thrive.

Overall, the Lido platform has once again demonstrated its strength in handling high volumes of transactions while protecting the interests of its users, making it a reliable choice for those interested in liquidity pledge agreements.

(400 words)

This article and pictures are from the Internet and do not represent Fpips's position. If you infringe, please contact us to delete:https://www.fpips.com/3317/

It is strongly recommended that you study, review, analyze and verify the content independently, use the relevant data and content carefully, and bear all risks arising therefrom.

Like (0)
Previous 02/25/2023 11:01
Next 02/25/2023 11:44

Recommended articles