Staking Protocol Lido Expands To Ethereum Layer 2

Key Takeaways

  • The Lido improvement staff has introduced plans to develop the protocol throughout numerous Ethereum Layer 2 scaling options.
  • It’ll initially purpose make a wrapped, non-rebasing model of stETH obtainable throughout the DeFi ecosystems of each Optimistic Rollups and ZK-Rollups.
  • With greater than 31% of all staked ETH processed by Lido, the protocol is a serious drive behind the securing of the Ethereum community.

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Lido has confirmed it’s going to initially launch the providing on Optimism and Arbitrum. 

Securing Ethereum on Layer 2

Lido is increasing to Layer 2.

A Monday blog post from the staking protocol’s improvement staff has revealed that Lido will develop to a number of of Ethereum’s Layer 2 options. With the replace, a wrapped model of Lido’s ETH staking token, dubbed wstETH, will quickly be obtainable on Layer 2 DeFi. 

Lido is a staking service supplier for Ethereum and different blockchains. It lets customers stake their ETH to acquire stETH, a token representing their stake, permitting them to place that to work in different protocols. Lido is the main participant within the so-called “liquid staking” area, and it’s soared in recognition over the previous 12 months as its product lets stakers earn yield from each staking and DeFi on the similar time. stETH often rebases to replicate the rising quantity of ETH it represents.

Within the weblog publish, the Lido staff stated that the mission was “network-agnostic” and had plans to develop to a number of Layer 2 options which have “demonstrated financial exercise.” The publish confirmed that it could first launch on the Optimistic Rollup options Optimism and Arbitrum. It has additionally built-in the ZK-Rollup initiatives Aztec and zkSync through Argent.

The enlargement can be made attainable by a wrapped, non-rebasing model of stETH known as wstETH. It will initially be the one token supported, although the protocol stated it plans to combine the rebasing stETH sooner or later. Based on the staff, the purpose is to allow customers to take part in securing Ethereum at a low price from their Layer 2 of selection. 

Lido’s place inside the Ethereum ecosystem has been the topic of debate in current months as greater than 31% of the overall provide of staked ETH is processed by the protocol, resulting in considerations that Lido is inadvertently making Ethereum extra centralized. The DAO just lately rejected a proposal to restrict Lido’s potential market share of staked ETH; it’s, nonetheless, discussing the implementation of a novel governance construction that may additional decentralize its decision-making course of.

Disclosure: On the time of penning this characteristic, the creator owned ETH and several other different cryptocurrencies. 

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