Lido DAO ($LDO) - A Staking Solution for Ethereum, Terra, and Solana.

The foundation of Ethereum's proof of stake (POS) network became live in December 2020, just a few weeks after Ethereum 2.0's Beacon Chain. The idea of Lido (LDO) was to remove some of the operational and technological obstacles to staking on the Ethereum network. How does Lido operate then? Let's read the article from today to find out more about Lido DAO.

What is LidoDAO?

For Ethereum 2.0 and other proof of stake (POS) blockchains, such as Solana (SOL), Polygon (MATIC), Polkadot (DOT), and Kusama, Lido is a DAO (decentralized autonomous organization) (KSM). Lido DAO employs LDO as its native utility token to control the addition and deletion of Lido node operators as well as to manage fee structures and distribution.

Without needing to lock or manage the staking architecture, Lido DAO users can stake their tokens and collect incentives. Users can stake Ethereum on Lido without making any minimum deposits or maintaining any infrastructure. Users are then able to take part in on-chain activities like lending and compound returns.

Lido provides non-custodial staking services that are different from the staking services offered by exchanges in an effort to address these problems. Users that stake Lido earn daily incentives in the form of derivative tokens like sEth. When money is deposited into the Lido staking pool, the stETH tokens are created, and they are destroyed when users withdraw their ETH tokens. The tokenized version of staked ETH, stETH, is issued in order to address the issue of capital inefficiencies.

When users deposit ETH, it is divided into 32-ETH sets and distributed among active Lido node operators. These operators utilize a public validation key to verify transactions involving staked assets from users. The hazards associated with single-validator staking's single-point-of-failure are eliminated by the usage of multiple validators.

Key Features of Lido DAO

The following are the key characteristics of Lido DAO.

Platform for Staking

Users can use Lido's staking platform to connect with a crypto wallet and stake any amount of ETH. As previously stated, the ETH to stETH exchange rate is 1:1, with a transaction fee of $38.40 and a reward fee of 10% deducted from the total sum of rewards.

Curve

Curve is an exchange liquidity pool that allows stETH to be acquired and used for stablecoin trading on Ethereum.

MakerDAO

Users can connect to a crypto wallet and use stETH tokens as collateral for loans on the MakerDAO platform.

Referral Program for Lido

A referrer can earn 1% of the total ETH staked through their link in LDO tokens through this program. Lido DAO has implemented a whitelist mode for referral programs, which means that rewards are only distributed to Lido DAO-approved partners.

How Does the Lido DAO Platform Work?

Staking, minting, and DeFi are the three major components of liquid staking on the Lido DAO platform.

• Staking: Users can stake any amount of ETH. The amount of ETH chosen by the users is given to Lido.
• Minting: Lido returns minted or Lido-native liquid representatives of ERC20 coins in exchange for ETH (stETH). The value of the coins returned is proportional to the amount of ETH staked by users.
• DeFi: stETH tokens can be used throughout the DeFi ecosystem to generate more, removing the need to lock up multiples of 32 ETH in Eth2 to obtain rewards.

The Lido DAO platform allows users to stake as much (or as little) ETH as they want on the Beacon Chain without locking them, with a 10% fee collected

The technology of Lido DAO

Users who wish to stake with Lido must deposit ether into the Lido smart contract, which runs on Ethereum 1.0. In exchange, the user receives stETH, which is a tokenized version of the ether staked by Lido. Holders of the stETH token can use it to participate in other decentralized protocols (e.g. lending). stETH tokens are created upon deposit and destroyed upon withdrawal. Withdrawals of staked ether are currently not possible, but will be available once Ethereum 2.0 transfers and smart contracts are implemented.

The deposited ether is distributed among the node operators chosen by the Lido DAO, who run validator nodes on behalf of the protocol. The ether that is deposited is then locked into the Ethereum proof-of-stake deposit contract.

Oracles are used to connect the beacon chain to the Ethereum 1.0 chain. The oracles, in particular, keep track of the balances of the validators on the beacon chain. On a daily basis, they send this data to Lido's Ethereum 1.0 smart contract. A validator's balance can rise due to rewards and fall due to slashing and staking penalties.

The stETH token ratio is recalculated with each update submitted by the Oracle. Profit is made if the staking rewards exceed the slashing penalties. The stETH balance rises by the same amount. The protocol charges a 10% fee on staking rewards, half of which is distributed to node operators and divided according to their stake value share. The other half is allocated to the Lido treasury.

LidoDAO token and tokenomics

LDO is the Lido DAO governance token that helps the staking platform achieve its goal of creating a trustless liquid staking service.

Key Metrics LDO

• Name: LDO token.
• Ticker: LDO.
• Blockchain: Ethereum.
• Token Standard: ERC-20.
• Contract: 0x5a98fcbea516cf06857215779fd812ca3bef1b32
• Token type: Governance.
• Total Supply: 1,000,000,000 LDO.
• Circulating Supply: 312,951,153.96 LDO
• Market Cap: $465,971,079

Token Utilities

LDO primarily provides governance rights to members of the Lido community. Anyone who owns LDO has the right to vote in any decision-making process, with their voting power determined by the amount of LDO they own. Other applications for LDO tokens include assisting with fee parameter management and the addition or removal of any node from the network.

Token Allocation

LidoDAO Team

This section will provide information about the core team and investors of Lido DAO

Core Team

The first personnels who engaged in the project includes many well-known names, such as banteg, CryptoCobain, Anton Bukov.

Semantic VC, ParaFi Capital, Libertus Capital, Terra, Bitscale Capital, StakeFish, StakingFacilities, Chorus, P2P Capital, and KR1 are among the Lido DAO members. Stani Kulechov of Aave, Banteg of Yearn, Will Harborne of Deversifi, Julien Bouteloup of Stake Capital, and Kain Warwick of Synthetix are among Lido's key angel investors.

Investors

Conclusion

Until now, Lido DAO experienced tremendous growth. Lido began by focusing solely on Ethereum 2.0, but has since expanded its reach to Terra and Solana. As more people use ETH, Lido DAO's dominance in liquid staking will grow, resulting in new partnerships, announcements, and projects. Let's see how Lido DAO (LDO) performs in the upcoming time.

Learn more about Lido DAO!

Website: https://stake.lido.fi/ Twitter: https://twitter.com/lidofinance

Telegram: https://t.me/lidofinance

Discord: https://discord.com/invite/vgdPfhZ

Reddit: https://www.reddit.com/r/LidoFinance/

FQAs about Lido DAO

What is the Lido token used for?

Lido DAO uses LDO as its native utility token to grant governance rights, manage fee structures and distribution, and govern the addition and removal of Lido node operators. Users can stake their tokens and earn rewards without having to lock or maintain the staking framework in Lido DAO.

Where can I buy Lido?

LDO coins can be purchased easily through crypto exchanges such as Uniswap, sushiswap, and balancer. Before you do so, make sure to thoroughly research each platform to find the best fit for you.

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