In order to provide a liquid staking solution for proof-of-stake (POS) blockchains, Lido brings together node operator partners that manage the validator infrastructure on the Ethereum, Solana, and Terra blockchains. The initiative was introduced in December 2020, when Ethereum 2.0 ("beacon chain"), the POS chain for Ethereum, initially entered Phase 0 and only permitted users to stake on Ethereum 2.0 in multiples of 32 ETH. Once staked to the beacon chain, ETH can no longer be bridged to the original Ethereum ("Ethereum 1.0"). With Lido, for instance, users can earn staking rewards on Ethereum 2.0 while preserving liquidity and lowering the 32 ETH threshold to any quantity. Lido provides liquidity by issuing stETH in exchange for customers depositing ETH. Users will be able to "unstake" their stETH for the corresponding amount of ETH2 on the beacon chain when it launches. Users can essentially receive staking incentives while retaining their liquidity by holding any Lido st-asset. As of February 2022, Lido DAO is compatible with Terra, Solana, and Ethereum 2.0, with support for additional POS blockchains to follow. LDO complies with the Ethereum network's ERC-20 governance token standard. Various DAO users and activities are also rewarded with LDO (as well as stETH and other assets within the treasury). Grants, referral program payouts, liquidity incentives, insurance purchase reimbursements, and bug bounty payments are a few examples of frequent DAO payments.
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