Lido Finance
Lido is a liquid staking platform for popular cryptocurrencies such as ETH, MATIC, DOT, KSM, and SOL. It enables users to earn staking rewards while still being able to use their tokens in DeFi applications. Lido offers staked tokens such as stETH and stMATIC, and users can participate in governance through the LDO token.
Categories:
DeFi
Updated:
2023-04-03
Tags:
Liquid Staking Derivatives
Ticker:
LDO
Token Strength.
Token Utility:
$LDO Governance token that provides voting rights and control over Lido Finance parameters and treasury management Enables community-driven decision-making regarding the future of Lido Finance $stETH A liquid staking derivative of ETH that allows holders to participate in staking rewards without sacrificing liquidity Can be used as collateral for loans and other DeFi applications, unlocking additional earning opportunities Allows investors to earn rewards from staking ETH while avoiding the complexity and technical requirements of running a validator node themselves Can be traded on various decentralized exchanges, providing flexibility and liquidity for holders.
Demand Driver:
Governance: LDO holders have a say in the treasury and protocol decisions. stETH liquid staking derivative: stETH is a liquid staked version of ETH which can be used in DeFi and earn staking rewards and can participate in yield farming opportunities.
Value Creation:
Lido Finance Protocol's value is in its liquid staking solution for popular cryptocurrencies like ETH, MATIC, DOT, KSM, and SOL. Staking and DeFi benefits are possible with staked tokens, and LDO token provides governance rights. This creates a sense of community and decentralization, making Lido ideal for maximizing staking rewards while retaining liquidity and participating in decentralized governance.
Value Capture:
Value accrual to token: The LDO token doesn't offer much utility beyond governance rights. So the value will only be reflected in as much as the users' desire for a say in the direction of the protocol. Value accrual to protocol: Lido Finance captures value by allowing users to stake their PoS tokens without lockup periods, generating revenue from staking rewards. 5% of the revenue is added to the treasury, ensuring the sustainability and development of the protocol.
Business Model:
The business model for Lido Finance protocol Revenue comes from: Collecting 10% of staking rewards generated by validators on PoS chains, e.g., Ethereum Revenue is denominated in: The native token of the PoS chain, e.g., $ETH for Ethereum Revenue goes to: 5% goes to the treasury and 5% goes to the validators who generate the staking rewards.
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Protocol Analysis.
| Problems & Solutions | Problem: The Proof of Stake (POS) staking ecosystem is hindered by illiquidity, making it hard for stakers to use their assets in DeFi. Solution: Lido protocol offers a secure and liquid staking solution, allowing users to stake assets in various cryptocurrencies and use them in DeFi as staked tokens. This allows stakers to earn rewards and utilize their assets in other protocols. The LDO token also allows for governance participation, empowering the community in the protocol's development. |
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| Predecessors | Rocket Pool - A decentralized Ethereum proof-of-stake infrastructure service that allows anyone to earn rewards on their ether holdings without needing to run their own validator node. |
Investment Take
... coming soon
Tokenomics Timeline.
2020-12-17
Lido Finance Launch
Lido Finance went live
2021-01-05
TGE
$LDO token generation event
2021-09-16
Solana Expansion
$SOL can now be staked via Lido
2022-02-18
Kusama Expansion
$KSM can now be staked via Lido
2022-03-02
Polygon Expansion
$MATIC can now be staked via Lido
2022-05-18
Polkadot Expansion
$DOT can now be staked via Lido
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