Lido Finance

Lido Finance is the largest liquid staking protocol that allows users to stake Ethereum without the 32 ETH minimum or lock-up period required by the Beacon Chain. Users deposit ETH and receive stETH tokens that represent their staked position while remaining liquid and composable across DeFi applications. Lido operates a network of node operators who validate on behalf of the protocol, and users earn staking rewards proportional to network validation yields. The stETH token maintains near-parity with ETH through arbitrage mechanisms while users can simultaneously earn staking rewards and trade or use their tokens in lending protocols, AMMs, and other DeFi applications. Example: A user stakes 10 ETH with Lido and immediately receives 10 stETH, which they can deposit into Curve's stETH/ETH pool to earn trading fees while their staked Ethereum continues generating 3-4% annual validation rewards. Why it matters for DeFi: Lido unlocked staked capital by creating a liquid derivative, enabling billions in capital that would otherwise be locked to actively participate in DeFi yield strategies and maintain protocol security simultaneously.

Category: defi, mining staking

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