- Lido charges a 10% fee on staking rewards, distributed to support node operations, DAO activities, and insurance reserves.
- By enabling fractional staking of assets such as less than 1 ETH, Lido lowers entry barriers and enhances participation.
Lido has a key platform for Ethereum staking, offering participants the ability to engage without locking up their capital. This protocol is notable for its implementation of liquid staking for Proof of Stake (PoS) networks, presenting a more adaptable alternative to conventional staking methods.
📊 Lido Analytics: September 9 – 16, 2024
TLDR:
– TVL up by 0.51% to $22.72b.
– 33,824 net ETH unstaked.
– 7d stETH APR at 2.90%.
– wstETH on L2 down -1.22% to 190,224 wstETH.
– (w)stETH 7d trading volume at $721.83m.— Lido (@LidoFinance) September 17, 2024
Operational Features and Advantages of Lido
Lido enables users to deposit ether and receive stETH tokens in return. These tokens represent the user’s stake in the network and maintain their liquidity, allowing for transfer, trade, or use within decentralized finance (DeFi) applications. This mechanism ensures that while users’ assets are employed in staking, they remain accessible and functional.
Lido on Ethereum:
Over the past week, 33,824 net ETH was unstaked through Lido. pic.twitter.com/Eeq8aimziJ
— Lido (@LidoFinance) September 17, 2024
Furthermore, Lido is structured as a decentralized autonomous organization (DAO), which means that holders of its governance token, LDO, have the ability to vote on significant protocol decisions. This participatory approach fosters a sense of community involvement and influence over the protocol’s future direction.
Role of LDO in the Marketplace
The governance token, LDO, facilitates user participation in decision-making and rewards mechanisms within the platform. Currently, LDO stands among the higher-ranked cryptocurrencies by market capitalization, highlighting its acceptance and utility in the broader cryptocurrency market.
Lido charges a 10% fee on staking rewards, which is distributed among node operators, the Lido DAO, and a reserve for penalty insurance. This fee structure supports the operational and security needs of the protocol while providing a less restrictive earnings mechanism for stakers.
Staking Lido distinguishes itself by permitting the staking of fractional assets, such as amounts smaller than 1 ETH. This capability, combined with streamlined staking processes via smart contracts, has broadened the scope of staking to include a wider array of investors.
It lowers barriers to entry and facilitates increased participation in staking without sacrificing asset liquidity.
Genesis and Development of Lido
Lido was established in December 2020 by developers Vasilii Shapovalov and Konstantin Lomashuk in response to the challenges posed by native Ethereum staking. These challenges became apparent with the initiation of Ethereum’s Beacon Chain, marking the transition from a Proof of Work (PoW) to a Proof of Stake (PoS) model.
Previously, Ethereum staking was irreversible until the implementation of “The Merge,” which introduced protocols for validators to voluntarily or forcibly exit. This inflexibility prompted the need for a solution that allowed stakers to retain liquidity, making Lido a critical development in the staking landscape.
