Lido is the dominant liquid staking protocol for Ethereum, holding over 30% of all staked ETH — making it by far the largest single staking provider and a critical piece of Ethereum’s infrastructure. Liquid staking solves a core problem: ETH staked to secure the Ethereum network was historically locked and illiquid. Lido issues stETH (staked ETH) tokens 1:1 for every ETH deposited. stETH accumulates daily staking rewards automatically (the balance increases each day) and can be used across DeFi — as collateral on Aave, in Curve liquidity pools, or as yield while still earning ETH staking rewards. Lido operates on Ethereum, Polygon, Solana, and other chains. LDO is the governance token, used to vote on node operator whitelisting, protocol fees, and upgrades. Lido charges a 10% fee on staking rewards, split between node operators and the DAO treasury. Lido’s dominance has sparked concern about Ethereum centralisation risk — Ethereum’s social layer relies on no single entity controlling more than 33% of staked ETH (the threshold to attack finality). Lido is governed by a distributed DAO but the concentration remains a debated systemic risk. In 2024, Lido launched wstETH (wrapped stETH) as the preferred form for DeFi integration due to its constant-balance ERC-20 compatibility.
Example: You hold 10 ETH but don’t want to lock it for staking. You deposit into Lido and receive 10 stETH. Over a year at 4% APR, your stETH balance grows to 10.4 stETH. Meanwhile, you also deposit the stETH into Aave as collateral, borrowing USDC to deploy in other strategies — earning staking yield and DeFi yield simultaneously.
Learn more: Lido Finance
