Lido Finance, a decentralized finance (DeFi) protocol and third-party staking pool operator for Ethereum (ETH) 2.0, aims to expand services across various Ethereum Layer 2 (L2) scaling solutions. Meanwhile, a new proposal seeks to secure around two years of “operating runway” for Lido DAO in stablecoins.
In a blog post on Monday, Lido announced plans to expand to several of Ethereum’s L2 solutions. The team explained that they will begin by supporting ether staking via bridges to L2s using a wrapped version of Lido’s ETH staking token, dubbed wstETH.
They eventually intend to allow users to stake directly on the Layer-2s “without the need to bridge their assets back” to the Ethereum mainnet.
As a reminder, Layer 1 is the Ethereum blockchain, while Layer 2s are separate blockchains built on top of the L1, which extend and scale Ethereum by processing transactions off of the Ethereum Mainnet.
The Lido team said that the project was “network-agnostic” and had plans to expand to multiple L2s that have “demonstrated economic activity.” They have already integrated the bridged staking services with ZK-Rollup projects Argent and Aztec, and will also launch on the Optimistic Rollup solutions Optimism and Arbitrum.
Lido is a staking service provider for Ethereum and other blockchains. It is currently the largest provider of staking services for Ethereum, where around a third of staked ETH (stETH) has been deposited. According to its website, Lido currently has more ETH 4.25m (USD 6.5bn) staked on the platform.
In the blog post, Lido claimed that the expansion to Layer 2s will enable users to stake ETH with lower fees while also gaining “access to a new suite of DeFi applications to amplify yields.”
“There are several types of L2s. We believe that in the future, a large portion (if not a majority) of economic activity and transaction volume will migrate to both general use and purpose-specific Layer 2 networks,” it added.
What does this mean? Lower gas fees + expanded DeFi ecosystem⚡️
Lido on L2 is not limited to a single network, but will unfold via an ongoing roadmap of L2 scaling solutions.
The supported Lido On L2 networks will be announced soon.
— Lido (@LidoFinance) July 18, 2022
Meanwhile, Jacob Blish, Head of Business Development at Lido, has put forward a proposal seeking to secure around two years of “operating runway” for Lido DAO (decentralized autonomous organization) in stablecoins.
“This will ensure Lido and its core contributors are able to continue the important work needed for the protocol in the long term and to flourish as an autonomous, self-governing collective,” he said in the proposal.
Blish suggested that the DAO sells 2% of the supply of its native token LDO from the treasury, which equates to LDO 20m, at a 7-day TWAP (time-weighted average price) with a 50% premium.
He calculated that at a price USD 1.452153 per LDO token, the DAO could raise USD 29m in DAI stablecoin.
Notably, the LDO token has taken a slight hit today, though it surged over the past seven days. At 9:23 UTC, LDO is trading at USD 1.47, down 8.6% in a day. Meanwhile, it’s up 136% in a week and 220% in a month.
Meanwhile, Lido faced community criticism in April this year for what was seen as an “unwavering commitment to being a monopoly” that damages Ethereum’s status as a decentralized blockchain – but the team said it aims to fix this.
Source: Cryptonews
