Lido Finance offers a liquid staking protocol for Ethereum that enables users to unlock staked ETH without minimum deposits and earn yields across the DeFi ecosystem. The platform issues a native token named stETH (a tokenized version of staked Ethereum) for every ETH token staked through its protocol in a decentralized manner, removing the reliance on a single party's private key management. Lido charges a 10% fee on staking rewards and is governed via its native “LDO” token.
As of May 2022, Lido served over 900,000 users, with a total value locked (TVL) of over USD 9 billion. During the same period, around 30% of the total ETH supply was staked through the protocol. As a result, a proposal to limit Lido’s market share of the total supply of ETH was presented to its community for debate.
In July 2022, Lido announced plans to expand stETH support across the ecosystem of Ethereum layer 2 (L2) networks, enabling users to stake directly on these L2 networks without bridging their assets back to the Ethereum mainnet. While Lido went on to deploy on Arbitrum and Optimism networks in October 2022, the protocol subsequently announced that it would be ending its staking program on Polkadot and Kusama in August 2023, and Solana in October 2023
Funding and financials
In March 2022, Lido raised USD 70 million in venture capital funding from Andreessen Horowitz (a16z). The firm also used Lido to stake an undisclosed amount of a16z Crypto’s (its crypto investment fund) Ethereum holdings on the Beacon Chain. In May 2022, the Lido DAO token was listed for sale on Binance.
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