Justin Sun withdraws $209M ETH from Lido Finance, profits $349M

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As a seasoned researcher with years of experience tracking the crypto market, I find myself constantly intrigued by the moves of key players like Justin Sun. His latest application to withdraw 52,905 ETH from Lido Finance is certainly a significant event that could potentially impact Ethereum‘s prices, as historical data suggests.

According to historical records, the individual who established TRON, Justin Sun, has requested to take out approximately 52,905 Ether, equivalent to around $209 million, from Lido Finance. This potential withdrawal might influence the value of Ethereum, according to past trends.

According to reports, Sun is said to have been a part of a broader Ethereum (ETH) stockpiling plan. This strategy apparently involved him buying 392,474 ETH at an average price of around $3,027 each. If these purchases were made correctly, they could potentially yield a profit of approximately $349 million.

As a researcher, I’ve noticed that it’s not an unprecedented event for the Sun entity to withdraw substantial amounts of Ether (ETH). Specifically, on October 4, 2023, approximately 80,253 ETH, equivalent to around $131 million, was withdrawn from Lido and transferred to Binance within a span of four days, roughly mid-October. Subsequently, there was a noticeable 5% decrease in ETH prices. The question now arises among analysts: Could Sun repeat this strategy when the withdrawn assets are made available for potential sell-offs on exchanges?

The significant withdrawal of $209 million from Lido Finance is noteworthy due to its highlighting the crucial role that Lido plays within Ethereum’s Proof-of-Stake infrastructure. As a protocol offering liquid staking, Lido addresses traditional issues related to staking such as resource scarcity and illiquidity by enabling users to stake ETH while retaining tradable stealth tokens in return.

52,905 Ether (currently worth approximately $209 million) was requested by Justin Sun (@justinsuntron) to be withdrawn from Lido Finance just an hour ago. This withdrawal is part of the net 392,474 Ether he reportedly acquired at around $3,027 per Ether ($1.19 billion) through three different wallets between February and August. If his estimated total profit of $349 million (+29%) holds true, it represents a significant increase in value.

— Spot On Chain (@spotonchain) December 16, 2024

Lido plays a significant role in Ethereum’s Proof-of-Stake system, holding over one third of all staked ETH. This makes it a key foundation for the network. However, substantial withdrawals like those by Justin Sun have sparked concerns about staking liquidity and potential market impacts. Lido’s liquid staking system increases token accessibility, but the prospect of sudden large-scale withdrawals exposes a critical weakness in staking protocols. These types of actions can stir fears of decreased liquidity. A notable instance occurred on August 5 this year, when potentially whale-initiated withdrawals caused the ETH price to plummet from $3317 to $2419.

Since Lido withdrawals don’t happen instantly (as they need to pass through the Ethereum staking queue), substantial withdrawal activity could suggest shifts in the market, particularly when several significant stakeholders make similar moves. This can potentially lead to an imbalance between locked-up and freely available assets.

Beyond his ETH withdrawal, Sun also transferred $964K worth of EIGEN, which is the native token for EigenLayer – a protocol enhancing blockchain security by enabling the restaking of collateral against intersubjective faults – to HTX, a well-known crypto exchange. This transaction suggests that he intends to distribute his liquidity among established tokens and other high-risk assets in his possession.

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2024-12-16 12:46