The staking concept is gaining much popularity enormously. People or investors are getting highly attracted to this activity. This concept is not new in the crypto world, after the emergence of the Beacon chain it is found as one of the influential operations. Researchers also concluded that staking started getting recognized with the launch of the Beacon chain and the introduction of PoS to the Ethereum ecosystem resulted in the replacement of Mining.
And, for staking Lido Finance is termed as a platform or a DAO that is contributing towards adding liquidity to the market. So through this brief read, we are going to have a prelude to the increasing Lido ecosystem.
Thus, to get an insight into the prime operation of this DAO let’s start getting into the read.
The emergence of Lido DAO
A finding of Konstantin Lomashuk, Vasiliy Shapovalov, and Jordan Fish, LIDO was introduced to the world in the year 2020. Launched with the aim of keeping the Beacon decentralized, it comes with the feature of encouraging people or users to participate in the staking activity. Also referred to as the staking solution for PoS networks it allows the users to stake any of the tokens to generate daily staking rewards. One of the major perks here is that people can employ their assets in the staking operation without locking them and they can even enjoy the on-chain activities in addition to generating rewards through the staking. There are several on-chain activities some of them are farming, lending, etc.
This DAO is involved in the staking activities, and the reason behind it is to bring liquidity to the market. For this, users deposit their coins and receive liquid trade tokens in return. Further, the funds of the users are controlled by the DAO.
On what other blockchains can you enjoy Lido staking?
To be noted, that this DAO offers staking operations on several networks. The name of a few of them are:
- Ethereum
- Polygon
- Solana
- Polkadot, and
- Kusama
How does Lido DAO staking work?
Lido Finance primarily works or focuses on Ethereum staking services. But, as time passed, this DAO thought of expanding its services to other networks as well, which include Terra and Solana as well. The staking operation on this platform works on a 1:1 basis which represents stETH, say staked ETH. Further, direct access to the staked assets doesn’t rest with the stake providers but rather the right to manage the stake assets of the users lies with the DAO.
To provide a layout of the working of the staking operation at Lido, the basic steps involved here are:
- Putting any amount of tokens for stake
- Receive stETH
- Optimize the received stETH in DeFi
Final Lines
Backed by several recognized ventures, Lido Finance is a platform that is majorly involved in the staking operation. Being highly engaged in any of the operations doesn’t claim that a particular platform is free from risks or online threats. But, when it comes to the risks involved in virtual space, there are a lot of risks relating to that platform. However, it is been predicted that this platform is going to dominate the DeFi, and the reason justifying this statement is that the value of the staked assets is expected to increase down the road. As mentioned in the read also, this primarily works for Ethereum, but now this DAO is focusing on increasing its reach and is including some networks through which investors can take part in the staking operation.
