Key Takeaways
- The Lido improvement workforce has introduced plans to develop the protocol throughout numerous Ethereum Layer 2 scaling options.
- It can initially purpose make a wrapped, non-rebasing model of stETH accessible 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 significant power behind the securing of the Ethereum community.
Share this text
Lido has confirmed it’ll 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 workforce 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 accessible 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” house, and it’s soared in reputation over the previous 12 months as its product lets stakers earn yield from each staking and DeFi on the identical time. stETH frequently rebases to replicate the rising quantity of ETH it represents.
Within the weblog publish, the Lido workforce mentioned 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 by way of Argent.
The enlargement shall be made doable by a wrapped, non-rebasing model of stETH known as wstETH. It will initially be the one token supported, although the protocol mentioned it plans to combine the rebasing stETH sooner or later. In accordance with the workforce, the objective is to allow customers to take part in securing Ethereum at a low price from their Layer 2 of alternative.
Lido’s place inside the Ethereum ecosystem has been the topic of debate in current months as greater than 31% of the whole provide of staked ETH is processed by the protocol, resulting in issues 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, nevertheless, discussing the implementation of a novel governance construction that may additional decentralize its decision-making course of.
Disclosure: On the time of scripting this characteristic, the creator owned ETH and several other different cryptocurrencies.
