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Lido

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description Lido Overview

Lido is the largest liquid staking protocol in the crypto ecosystem. It allows users to stake their Ethereum (ETH) to secure the network while receiving a 'liquid' token (stETH) in return. This enables users to earn staking rewards while still maintaining liquidity to use their assets in other DeFi applications, effectively solving the capital lock-up problem of traditional staking.

help Lido FAQ

What do I actually receive when I stake ETH through Lido?

You receive stETH, an ERC-20 token that represents staked ETH plus accrued staking rewards. The idea is that you can keep liquidity while your ETH helps secure Ethereum.

Can stETH be withdrawn back to ETH after Ethereum's Shapella upgrade?

Yes. Ethereum enabled validator withdrawals with the Shapella upgrade in April 2023, and Lido later added its withdrawal flow for stETH holders.

What is the main risk people discuss with Lido?

The big concern is concentration because Lido has been the largest Ethereum liquid staking protocol. Users also have smart contract risk and stETH market-price risk if they trade the token before redeeming it.

How is Lido different from Rocket Pool or Coinbase cbETH?

Lido is a DAO-run liquid staking protocol centered on stETH. Rocket Pool uses rETH with a different node-operator model, while Coinbase cbETH is tied to Coinbase's custodial staking service.

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