In Proof-of-Stake cryptocurrencies, users can temporarily “ stake ” their coins to contribute to the security of the network and gain stake rewards in return. however, the bet on coins can not be used for any other purpose while they ’ ra being staked .
Liquid stake protocols this issue by giving users access to liquidity even while their coins are being staked. This makes it potential to earn staking rewards while effectively besides using the funds elsewhere, for example to earn give way in DeFi protocols. Lido accomplishes this by issuing “ stTokens ”, which represent impale coins. For case, person venture ETH through Lido would receive an equivalent sum of stETH in return key .
The Lido protocol is governed through a decentralized autonomous administration ( DAO ), which uses the Lido DAO Token ( LDO ). LDO token holders can vote on key decisions and parameters through the Lido DAO.
here ’ s a promptly compendious of some of Lido ’ s most authoritative features :
- Liquid staking solution for multiple blockchain platforms
- Lido users can stake their coins and simultaneously stay liquid thanks to stTokens
- LDO is used to govern the Lido protocol through the Lido DAO
- LDO functions as an ERC-20 standard token on the Ethereum blockchain
What is Lido and how does it work?
As we ’ ve already mentioned, Lido allows users to retain liquid even while their coins are being staked. After the coins are staked, they are represented with stTokens, which are redeemable for the stake coins and accrue stake rewards over time. Liquid venture is useful for those that want to stake their coins, but besides want to deploy them in other opportunities in the crypto market adenine well .
In the sheath of Ethereum, Lido besides lowers the barrier to introduction for staking. Solo staking on Ethereum requires 32 ETH, which is more than the median cryptocurrency investor can afford to invest. Through Lido, users can stake smaller amounts as the protocol pools in concert smaller deposits to plunge validators .
The balances of stTokens change on a casual footing through a mechanism called the “ rebase ” to reflect the stake rewards ( and potentially besides penalties ). stTokens can be redeemed for the underlie tokens at a ratio of 1:1. This will besides be possible for stETH, once Ethereum transitions to Proof-of-Stake and an ascent is introduced to allow coins to be unstaked. In the interim, users can trade stETH for ETH on decentralized exchanges and other trading venues .
hera are the different Proof-of-Stake cryptocurrencies supported by Lido at the time of compose :
Read more : Upstate Coin & Gold Center
meanwhile, Lido ’ s crypto asset LDO is used to facilitate the protocol ’ s administration march. Through the Lido DAO, LDO holders can vote on the protocol ’ s fee structure, node operators, oracle service providers, and other cardinal decisions related to the protocol .
Lido price history
Lido has emerged as the leading liquid impale service for the Ethereum ecosystem, which has helped the LDO crypto reach a significant valuation. In fact, LDO is presently one of the most valuable administration tokens on the market. On CoinCodex, you can view the up-to-date LDO price chart a well as the complete Lido crypto price history .
LDO was primitively launched in December 2020. Lido ’ south cryptocurrency has seen quite a sting of price volatility during its meter on the market. Let ’ s take a expect at some of the most crucial historical milestones for the LDO price :
- $2 – The price of LDO reached $2 for the first time ever in February 2021
- $3 – The LDO price first exceeded $3 in May 2021
- $4 – The price of LDO first reached $4 in May 2021
- $5 – LDO value hit $5 for the first time in May 2021
- $6 – LDO token price reached $6 for the first time in August 2021
The Lido grocery store hood has of class besides seen big fluctuations as the marketplace went through its cycles. The token ’ south market cap is besides impacted on LDO ’ s token exhaust agenda, as the Lido DAO can vote to release tokens from its treasury to fund projects that are deemed valuable for the Lido ecosystem.
The launch of the Lido DAO was accompanied by the mint of 1 billion LDO tokens, which is the LDO soap issue. however, the circulating supply of LDO is smaller, as a dowry of the tokens was locked for one class, and was then subject to a one class vesting period. here is the plan allotment for the LDO token provision :
- DAO Treasury: 36.32%
- Investors: 22.18%
- Validators and signature holders: 6.5%
- Initial Lido developers: 20%
- Founders and future employees: 15%
The circulating supply of LDO will grow over time as a larger number of vested tokens is released onto the market .
The most important Lido milestones
While Lido is a relatively new project, it has still reached some noteworthy milestones and has become a leadership platform for Liquid staking. Let ’ s go through some of the most crucial developments in Lido ’ sulfur history :
- December 2020: Lido launches shortly after Ethereum’s Beacon Chain goes live
- April 2021: The project launches the Lido Ecosystem Grants Organization (LEGO)
- November 2021: Lido introduces support for liquid staking on Solana
- March 2022: Lido begins supporting liquid staking on Polygon
- April 2022: Lido’s Total Value Locked (TVL) surpasses $20 billion