back Back

Pluto Digital ensures users can withdraw staked Ethereum at no loss despite market volatility

By Joy Dumasia

July 04, 2022

  • Blockchain Technology
  • Crypto
  • Crypto Trading
Share

Pluto Digital, the crypto tech and operations company announced that it has taken the unprecedented step of protecting users of the YOP platform from the short-term volatility in the crypto market by guaranteeing Ethereum (ETH) withdrawals from the ETH Vault. It has achieved this by depositing 60 ETH of the Group’s own reserves. The move is designed to ensure that any users who wish to withdraw their funds can do so safely and at no loss.  

The news comes as staked Ethereum (stETH), pegged to ETH on a 1:1 basis, decoupled on secondary markets. ETH Vault Depositors are exposed to this decoupling as 53 per cent of funds are allocated to the stETH pool strategy on Curve.   

This exposure is not realised until the YOP Strategy which carries the exposure to stETH reaches maturation or is unwound. If any of the funds in the strategy are withdrawn, then the divergence in price between ETH and stETH would be locked in and result in a roughly five per cent loss.  

To avoid this eventuality, the Group has deposited 60 ETH, which means that 74 per cent of stETH-exposed assets are guaranteed. The deposited ETH will not be allocated to the YOP Strategy and will be used purely to backstop withdrawals. The Group estimates this amount to far exceed anticipated withdrawals and should avoid triggering any loss to the fund from stETH decoupling.  

The Group does not envisage that it will incur a loss by using its own ETH to guarantee withdrawals as stETH will automatically become redeemable for ETH on a 1:1 basis when ETH 2.0 launches. Completing the ETH 2.0 Merge will unlock all the currently staked ETH and, thereby, illiquid, to be withdrawn. Further, the Group expects stETH to recouple long before this as this redemption mechanism means that the stETH discount will likely be arbitraged away by investors anticipating the ETH 2.0 launch.  

Barry Downes, Director of Pluto, comments: “Our strategy in the current macro-economic climate is to provide stability to all our users. We want to ensure that none of our users are exposed to the current price variance of stETH and that they are able to take their money out safely and at no loss. As far as we know, we are the only crypto platform that is providing this level of security for its users and proud to be in a position to help our users navigate this short-term turbulence safely.”   

IBS Intelligence recently reported that Pluto Digital, the crypto tech and operations company, announced the public launch of its Yield Optimisation Platform (YOP). The platform is designed to make it simple and easy for anyone to earn a passive income on their crypto, regardless of their command of De-Fi. 

Previous Article

July 04, 2022

5 FinTech deals that took place in the first half of 2022

Read More
Next Article

July 05, 2022

Helvetia selects NeoXam to support its tech expansion project

Read More






IBSi Daily News Analysis

Data privacy

July 16, 2024

Blockchain Technology

Rise in sophisticated attacks, state-level threats, and increased ransom DDoS Incidents

Read More

IBSi FinTech Journal

  • Most trusted FinTech journal since 1991
  • Digital monthly issue
  • 60+ pages of research, analysis, interviews, opinions, and rankings
  • Global coverage
Subscribe Now

Other Related News

July 15, 2024

Wirex & Visa expand partnership to fuel Web3 payment adoption

Read More

July 12, 2024

Nuvei and Mastercard team to enable crypto to fiat conversion

Read More

May 08, 2024

Revolut debuts crypto trading platform for professional traders

Read More

Related Reports

Sales League Table Report 2024
Know More
Global Digital Banking Vendor & Landscape Report Q2 2024
Know More
NextGen WealthTech: The Trends To Shape The Future Q4 2023
Know More
IBSi Spectrum Report: Supply Chain Finance Platforms Q4 2023
Know More
Treasury & Capital Markets Systems Report Q1 2024
Know More

IBSi Sales League Table

The industry acknowledged barometer of global banking technology vendor performance!
Get your copy now!
close-link
Get your copy now! IBSi Sales League Table 2024