On the Beacon Chain, Lido is the owner of almost 40% of the ETH staked.
Lido Finance, one of the largest Merge staking providers, has started on two layer-2 networks, Arbitrum and Optimism, in a move that, according to the company, considerably increases Ethereum staking accessibility while lowering gas costs.
When the team accepted that various layer-2 networks had “demonstrated economic activity,” the expansion to L2 was first announced. On October 7, the fresh deployment to L2 networks Arbitrum and Optimism went live.
Instead of immediately staking Ethereum and having it locked up, Lido offers liquid staking, giving stakers more flexibility by allowing them to withdraw their money whenever they want.
Leaders in the industry, including Alesia Haas, chief financial officer of Coinbase, have said institutional staking won’t take off unless the problem of asset lockup can be resolved in the past. Because Lido offers this adaptable or liquid staking option, its appeal has increased.
The Wrapped Staked Ether (wstETH) token from Lido is able to connect to the two networks thanks to the initial stage of its layer-2 implementation.
The Lido wrapped version of stETH maintains a fixed balance of stETH for usage in decentralized finance (DeFi) applications that demand a constant balance mechanism. stETH is the Ethereum liquid staking token that Lido issues in proportion to Staked ETH.
Additionally, starting on launch day, Lido will reward wstETH bridged across each network with 150,000 Lido DAO (LDO) tokens per month. The project intends to increase wstETH liquidity for DeFi partners Kyber Network, Balancer, and Curve’s farming incentives.
On its website, Lido claims to have $7.4 billion worth of ETH staked, or about 5.5 million tokens, or almost 40% of the total staked. As the crypto epidemic began to spread, it was also reported that stETH lost its peg to Ether (ETH tickers down $1,332) but recovered quickly.
It has decided to deploy layer-2 networks initially, and these networks collectively account for 80% of the market.
According to L2beat, Optimism has a 30% market share and a $1.45 billion total value locked (TVL), while Arbitrum has a 51% market share and $2.42 billion in TVL.