What is Lido?

Lido is a staple in many altcoin traders’ portfolios.However,Before you Trade LDO, it is vital that you understand what you are investing in. Let's find out what's LDO and how it functions.

To stake Ethereum, you may use Lido, a liquid staking service. Lido provides users with 1:1 tokenized representations of staked assets. This allows individuals to receive staking incentives on Lido and partake in other DeFi on-chain activities, as their staked PoS tokens are liquid.

How is Lido different?

The introduction of liquid staking services like Lido, which lets users stake any amount of PoS assets in exchange for block rewards, has increased the number of users actively participating in securing (PoS) networks. Instead of locking up the user's staked tokens, the revolutionary solution of liquid staking overcomes the illiquidity, complexity, and centralization of PoS staking. Because of this, staking is easier to get into and the opportunity cost of lock-up restrictions is reduced

Users' tokens are staked on the PoS blockchain through the Lido protocol when they deposit PoS assets to Lido. It is a staking pool smart contract, and it handles things like user deposits and withdrawals, money delegation to node operators, staking reward fees, token minting and burning. The smart contract also includes a comprehensive directory of node operators together with their respective validation keys and records of incentive distribution.

Users will be rewarded more for their deposits by using the tokenized form of that money (stAsset tokens) in other DeFi protocols and dApps, such as collateral for lending and yield farming.

In Lido, users can stake as little as 0.00000001 ETH to participate in block rewards. Staking ETH results in the customer receiving stETH, an ERC-20 token that is a 1:1 representation of their staked ETH. As ETH is withdrawn from the Lido staking pool smart contract, stETH tokens are destroyed.

The staked ETH will be dispersed among Lido node operators (validators) and sent to the Ethereum Beacon Chain for verification. A smart contract protects the funds such that even validators can not get at it. Following this, the Lido DAO will pick validators, bring them on board, provide them with ongoing assistance, and add their addresses to the registry smart contract, at which point they will be issued a set of validation keys.

To validate transactions containing staked assets, the ETH users have placed will be divided into blocks of 32 ETH and distributed to all active Lido node operators, who will employ a public validation key. The risks associated with a single point of failure in a validation process are mitigated by spreading users' stakes over numerous validators.

Lido DAO

Lido developed a decentralized autonomous organization (DAO) to govern the protocol and make crucial choices about how it should be run. This ensures more transparency and decentralization within the protocol and guarantees that it serves the interests of all parties involved.

Lido DAO regulates a set of liquid staking protocols. It uses smart contracts to set and enforce rules to make decentralized decision-making more effective. These include the addition and removal of node operators and the management of fee parameters and distribution

How many LIDO tokens are there?

A total of one billion LDO coins were created at genesis on December 19, 2020, when Lido released its staking app. As of this writing, 64% of LDO tokens are owned by Lido DAO founders. These are locked for a year and vest over another. Only the 0.4% airdrop given to early staking participants and the DAO treasury tokens remain unlocked in LDO.

These tokens are distributed as follows:

• DAO treasury - 36.32%
• Investors - 22.18%
• Validators and signature holders - 6.5%
• Initial Lido developers - 20%
• Founders and future employees - 15%

Founders

Lido provides a liquid staking solution for Ethereum 2.0, allowing users to receive staking rewards without maintaining infrastructure.

Members of Lido DAO include Semantic VC, ParaFi Capital, Libertus Capital, Terra, Bitscale Capital, StakeFish, StakingFacilities, Chorus, P2P Capital, and KR1. Key angel investors such as Stani Kulechov of Aave, Banteg of Yearn, Will Harborne of Deversifi, Julien Bouteloup of Stake Capital, and Kain Warwick of Synthetix are also backing Lido.

The Lido DAO's developers and backers have a solid reputation and track record in the DeFi industry.

Where can you buy LDO?

LDO is available on the licensed cryptocurrency exchange CryptoForce and several other national and international exchanges.

Disclaimer: Cryptocurrencies are highly volatile and subject to market, technical, and regulatory risks. Crypto trading requires one’s own diligence, and Cryptoforce will not be responsible for any losses incurred. Any information provided here should not be regarded as Cryptoforce’s technical or financial advice