Lido Finance activates staking rate limit after more than 150,000 ETH staked

cointelegraph.com:

Liquid staking protocol Lido Finance has pushed the big red button in order to activate a protocol safety feature called "Staking Rate Limit" after more than 150,000 Ether was staked with the protocol in a single day.

Lido is a liquid staking solution for digital assets, in this case allowing users to stake Ether (ETH) without them needing to have their tokens locked. When a user deposits Ether, Lido issues them a liquid variant of ETH, known as staked ETH (stETH), giving users staking rewards for each day the tokens are held in their wallets.

Lido protocol has registered its largest daily stake inflow so far with over 150,000 ETH staked. Upon reaching this number, a curious (but important) protocol safety feature called Staking Rate Limit was activated. Here’s how it works pic.twitter.com/ngBtWz7q18

According to the liquid staking protocol's Feb. 25 tweet, the "dynamic mechanism” was activated after the daily staking limit of 150,000 Ether was reached.

In a related guide, Lido explained that the “safety valve” is aimed at limiting the amount of staked ether (stETH) that can be minted during times of high inflows, which is intended to address the possible ill side effects, such as rewards dilution.

“This means it is only possible to submit this much ether to the Lido staking contracts within a 24-hour timeframe,” it explained.

The mechanic works by limiting the amount that can be minted based on deposits within the last 24 hours, replenishing capacity at the rate of 6,200 Ethereum (ETH) per hour.

"It works by decreasing how much total stETH can be minted at any one time based on recent deposits, and then replenishing this capacity on a block-by-block basis," Lido said.

Lido noted the Staking Rate Limit mechanism would affect