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Interchain info © 2025

Lido
Lido

Lido

DeFiLiquid Staking

Lido is a leading liquid staking solution across Ethereum, Solana, and Polygon, offering an innovative approach to staking in the DeFi ecosystem. It allows users to earn rewards on their staked tokens while maintaining their liquidity for use in various DeFi applications. Lido operates under a decentralized autonomous organization (DAO), which manages its protocols and governs through the LDO token. Key advancements include the introduction of Lido V2 for greater decentralization and expansion into the Cosmos ecosystem with partners Neutron and Axelar.

Introduction

Lido represents a significant advancement in blockchain technology, offering an innovative approach to staking and liquidity in the decentralized finance (DeFi) ecosystem. This document provides a comprehensive overview of Lido’s functionalities, operations, and recent developments.

What is Lido

Lido is a collection of open-source, peer-to-peer software tools operating on Ethereum, Solana, and Polygon networks​​. It is the leading liquid staking solution, simplifying the process of earning rewards on digital tokens. Lido ensures the liquidity of staked tokens, allowing their use across various DeFi applications while accruing rewards​​.

Liquid Staking

Traditional staking in Proof-of-Stake networks involves locking tokens for a fixed reward, limiting their use in other potentially more lucrative DeFi activities​​. Liquid staking, as introduced by Lido, resolves this by allowing staked tokens (represented as st[token]) to be used in other trading opportunities. This innovation enhances the flexibility and potential returns of staking activities.

Lido Tokens

Lido issues two types of staking tokens on Ethereum: stETH and wstETH. stETH is a rebaseable token representing staked ether, with its supply reflecting the total staked ether and rewards. wstETH, on the other hand, maintains a constant quantity while its value increases over time​​.

Lido DAO

The Lido DAO (Decentralised Autonomous Organisation) is central to Lido’s governance. It manages the liquid staking protocols, makes key decisions, and accumulates service fees for protocol development and other expenses​​. Holding the LDO governance token allows members to vote on various aspects of Lido’s operations, influencing its future direction​​.

Functions of Lido DAO

The DAO oversees several critical areas, including:

  • Building and updating liquid staking protocols.
  • Managing node operators and penalizing underperformers.
  • Approving grants and operational payments.
  • Implementing a bug bounty program and emergency responses.
  • Accumulating and distributing service fees​​.

Governance and Security

Governance in Lido is facilitated by LDO tokens, with voting weight proportional to the number of tokens held. The DAO places a high priority on security, conducting multiple audits and implementing a non-custodial staking service to mitigate risks​​.

Recent Developments

Lido V2

Lido V2 is a major upgrade aimed at increasing decentralization. It introduces a Staking Router for a more diverse validator ecosystem and allows stETH holders to withdraw at a 1:1 ratio, a significant step in enhancing user autonomy​​. This upgrade is expected to strengthen Ethereum’s decentralized nature and offer more flexibility and security for stakers and node operators​​.

Expansion to Cosmos

Lido has partnered with Neutron and Axelar to launch its wstETH token in the Cosmos ecosystem. This move aims to enhance cross-chain interoperability and support the expansion of Lido’s liquid staking solutions​​​​.

Community and Developer Involvement

Lido encourages community and developer involvement, with an open call for contributions to its protocol, especially in the context of the Staking Router’s modular functionality​​.

Conclusion

Lido’s approach to liquid staking, combined with its governance model and continuous innovation, positions it as a pivotal player in the DeFi landscape. Its expansions and upgrades are set to further its impact across multiple blockchain networks.

CONTENTS

  • Introduction
  • What is Lido
  • Lido DAO
  • Recent Developments
  • Conclusion

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Resources

  • Onboarding “Drop” to the Lido Alliance | What It Means for Neutron

    Onboarding “Drop” to the Lido Alliance | What It Means for Neutron

    Lido + Drop + Neutron = 📈

    May 24 · 2 min read
  • Step into the MilkyWay: Introducing a Celestia Liquid Staking Protocol

    Step into the MilkyWay: Introducing a Celestia Liquid Staking Protocol

    With Celestia’s recent mainnet launch, MilkyWay is already looking to provide liquid staking services for the $TIA token.

    Nov 2 · 14 min read
  • Introducing Dexter – Interchain DEX for Yield-Generating Assets

    Introducing Dexter – Interchain DEX for Yield-Generating Assets

    A long time ago, in a galaxy far, far away, a breed of super-intelligent degen robots started exploring the Cosmos. These degen robots traveled across the challenging DeFi landscape of the Interchain in search of sustainable yield. On their quest, they came across Persistence — The Liquid Staking Hub for PoS. Dexter, their most reliable and […]

    April 28 · 11 min read