Lido launches layer-2 Ethereum Staking and LDO Rewards

Lido Finance is one of the largest Merge staking providers. It launched two layer-2 networks, Arbitrum and Optimism. This move, it claims, further increases accessibility to Ethereum staking and reduces gas fees.

In July, the team revealed the plan to expand L2 when it acknowledged that many layer-2 networks had “demonstrated economically activity.” The new deployment to L2 networks Arbitrum and Optimism was launched on October 7.

Lido allows for liquid staking. This gives stakers more flexibility as they can withdraw funds at any moment, as opposed to directly staking Ethereum and locking it up.

Coinbase Chief Financial Officer Alesia Háas has previously stated that institutional Staking won’t take off until the problem of asset lockup is solved. Lido is a flexible and liquid option for staking, which is why it’s grown in popularity.

The first phase of the layer-2 rollout allows the bridging Lido’s Wrapped Staked Ethereum (wstETH), token between the two networks.

stETH, the Ethereum liquid staking token Lido issues in proportion with Staked ETH. The wrapped version of stETH keeps a fixed balance for use in Decentralized Finance (DeFi), applications that need a constant balance.

Lido will also be allocating 150,000 Lido DAO tokens (LDO) in rewards each month starting on the launch date for wstETH-bridged across all networks. This initiative will build liquidity in wstETH for farming incentives on DeFi partners such as Balancer, Curve, and Kyber Network.

According to Lido’s website, Lido holds $7.4 billion worth ETH. This is roughly 40% of total staked. It was also reported that stETH lost the peg to Ether ( -ETH) earlier in the year due to crypto contagion. However, recovery was quick.

Similar: Nansen controls 64% of staked ETH.

It has a market share of 80% between the layer-2 networks it chose to deploy first.

Arbitrum leads the market with a 51% share and $2.42 Billion in total value locked (TVL), while Optimism holds a 30% share, and a $1.45 Billion TVL, per to HTML2beat.

Opinion writer on 7trade7