Lido offers a solid platform for staking different cryptos and earning daily rewards.
All without locking up the liquidity of your funds.
There are several good reasons to look at Lido as the ideal crypto staking platform. Operating since its launch in December 2020, the platform is a leader in the liquid staking sub-sector.
Lido is a non-custodial crypto staking platform that offers an easy route into crypto staking. Among its many benefits is allowing users to start earning from crypto staking without much experience or any infrastructure. You can stake any amount of several different cryptos on Lido.
In this article, we take a deep dive into Lido and what it has to offer.
We also share a few easy steps to help you stake on the liquid staking platform.
- Lido is a liquid staking platform running on Ethereum, Solana, Polygon, Polkadot, and Kusama blockchains
- Lido has no minimum staking requirement
- Lido allows users to earn from crypto staking without the need for staking infrastructure
- Lido does not lock up crypto assets for crypto staking
- Lido derivatives can be traded and used on various Defi platforms while earning from them through crypto staking
- Lido features a governance token called LDO token
- Lido is managed by the Lido DAO
What is Lido?
Lido is a liquid staking platform running on several blockchains including the Ethereum 2.0 Beacon blockchain, Solana, Kusama, Polygon, and Polkadot blockchains.
The platform allows users to stake tokens without locking them up or maintaining expensive staking infrastructure.
Lido makes it easier for any ETH holder to participate in Ethereum operations. Lido makes Ethereum more inclusive and decentralized. ETH holders can stake as little as a fraction of an ETH on Ethereum 2.0 and earn passive income.
Users can also unstake their tokens at any time with no consequences.
A plus for Lido is that its derivatives are liquid, meaning you can use them on various Defi applications while earning from them through crypto staking.
How Does Lido Work?
When you send your ether into the Lido liquid staking smart contract you receive a corresponding amount of staked ether or stETH. These tokens represent your initial crypto deposit and daily staking rewards. StETH tokens are tokenized versions of staked ETH and they are pegged 1:1.
StETH tokens are a liquid alternative to staked ETH. They can be transferred, traded, or used in DeFi applications. They can be used like regular ETH to earn lending rewards and yields.
StETH tokens are minted immediately after you deposit funds on Lido and burnt when they are redeemed.
stETH charts and info (CoinGecko)
The LDO Token
LDO tokens are Lido governance tokens. They enable holders to vote in the Lido DAO. LDO voting weight is proportional to the amount of LDO a voter stakes in the voting contract. Each LDO token holds the weight of one vote, meaning the more LDO tokens a holder locks in a voting contract the greater their decision-making power.
It is worth noting that the LDO voting mechanism enables the Lido DAO make changes to the governance structure without affecting other functions on the platform.
How Do I Stake ETH on Lido?
Staking on Lido is quick and easy. This walk-though uses ETH as an example but obviously you can choose other cryptos.
Go to stake.lido.fi and connect your supported wallet
Unlike most crypto platforms Lido does not require users to create a user account before accessing its services. You simply have to go to the platform and click on the “Connect wallet” button to gain access to the platform.
Some of the supported crypto wallets include MetaMask, WalletConnect, Ledger, Coinbase, Trust, imToken, Coin98, Mathwallet, and Tally. You’ll first have to agree to the terms and conditions before connecting your wallet.
Enter the amount of ETH you wish to stake
Once you’ve connected your wallet to Lido go ahead and enter the amount of ether you wish to stake. Lido, unlike most staking platforms, does not have a minimum staking requirement.
Confirm your transaction with your wallet
When you’ve keyed in your staking amount and confirmed the digits click the “submit” button. You can then confirm the transaction with your wallet. In your wallet will be stETH, representing your staked Ether. Your stETH balance will be updated after every 24 hours to reflect your staking rewards.
And just like that, you can start earning from your staked ETH. Lido charges a 10% fee on staking services provided. The fee is deducted from your staking rewards.
What are the Benefits of Staking on Lido Compared to Alternatives?
There are many quite a few benefits to staking on Lido. Some of them include:
No minimum staking requirement
Lido allows users to stake as little and as much ETH as they wish – even a fraction of ETH can begin earning.
No need for staking equipment or expertise
Lido allows any ETH holder, regardless of their staking expertise level, to benefit from ETH staking. All users have to do is connect their wallets to the platform, key in the amount of ETH they wish to stake, and let the platform do the rest.
No locking up of funds
Lido does not lock up users’ funds for staking purposes. Users have the advantage of using and trading their staked tokens.
No unstaking period
Lido users also get to benefit from a no unstaking period. Unlike other staking platforms, Lido users can unstake their funds at any time to use them for other things.
Earn daily staking rewards
Lido users have the benefit of earning staking rewards every 24 hours. You don’t have to wait a week or month to get your rewards.
Staked tokens can be used in secondary markets
Staked tokens can be traded and used as collateral for DeFi loans or yield farming.
Alternative to self-staking and exchange staking
Lido provides a platform where crypto holders who don’t wish to self-stake or stake via a crypto exchange can utilize.
Are there any Risks of Staking ETH on Lido?
As with most things in crypto, a few risks do come with choosing to stake your ETH on Lido. None of them look like deal-breakers to us, but you should be aware of them and manage your exposure accordingly:
Ethereum 2.0 technical issues?
Not really an issue. This would have been a concern in the early days after the Merge onto Ethereum 2.0 (Proof-of-Stake) blockchain but its safe to say that its proven to be capable.
This upgrade was a challenging process and it took years to finally make the move from the energy intensive (but arguably more secure) Proof-of-Work blockchain over to Proof-of-Stake but so far so good. Technical issues could arise but seem unlikley at this point.
Smart Contract bugs
Smart contract bugs are a problem for many crypto platforms that rely on smart contracts for service delivery. Considering Lido relies on smart contracts for crypto staking then bugs can be an issue hindering impeccable service delivery.
It is worth noting that Lido is aware of possible smart contract bugs and has implemented a few ways to reduce the issue including having its code audited and open-sourced. The platform has also launched a bounty program to minimize any bugs that may still be in its system.
If validators fail to perform their duties as expected they risk staking penalties, which include slashing. Slashing means that a significant part of a validator’s stake is removed.
On Lido, validators risk up to 100% of their staked funds getting slashed.
The Lido DAO
The Lido DAO manages the affairs of Lido. The DAO is made up of individuals who build the tools and services needed to stake Ethereum.Besides technical development, the Lido DAO also works to promote Lido and recruit new users, node operators, and validators with educational content, promotional campaigns, and affiliate marketing.
Lido DAO members include LDO token holders who vote on critical areas of the network including selecting oracles and node operators and adjusting fees.
Fees collected by the organization go into essential areas such as protocol upgrades, insurance, and research development.
Lido and other Blockchains
Besides Ethereum, Lido also runs in the Solana, Polkadot, Polygon, and Kusama blockchains.
Lido — Solana
Lido for Solana is a liquid staking protocol for the Solana blockchain. SOL holders can use the service to stake SOL tokens in exchange for staked SOL or stSOL. Like stETH, stSOL can be traded or used across several Defi protocols.
Lido — Polygon
Lido for Polygon is a liquid staking protocol for MATIC. MATIC token holders can stake with Lido on Polygon to earn staking rewards. Users deposit their MATIC tokens and receive stMATIC tokens in exchange. stMATIC tokens like stSOL tokens can be used in secondary markets.
Lido — Polkadot
Lido for Polkadot, also known as “Lido DOT” is a liquid staking protocol for the Polkadot blockchain. The protocol enables users to earn daily staking rewards without the need for maintaining staking infrastructure. DOT holders deposit their DOT tokens on Lido and are given stDOT tokens in exchange.
Lido — Kusama
Lido for Kusama is a liquid staking protocol for the Kusama blockchain. KSM holders can use the protocol to earn daily staking rewards without having to lock up their KSM tokens. Once a user deposits their KSM tokens on Lido they get stKSM in return, which can be traded and sold on various DeFi protocols.
All blockchains that support Lido benefit from its advantages. Users of the supported blockchains get to earn staking rewards without having to maintain staking infrastructure. They also don’t have to worry about their tokens getting locked up for a certain period or unstaking periods.
Users of these blockchains have to first link their wallets to Lido and then deposit their respective tokens to benefit from its staking services.
Lido is still our top pick for best ETH staking platform.
It’s easy to get set up, minimal requirements, it’s non-custodial and it pays around 3—4% APY.
You can stake your ETH (stETH) using Ledger Live and retain not only self-custody, but also cold storage.
Why we chose Lido:
- Easy to use
- Non-custodial staking services
- No minimums
- Does not lock up tokens
- Users can unstake their crypto any time
- stETH can be used like regular ETH to earn yields and lending rewards
- 3—4% APY
Lido stands out as a popular decentralized staking platform.
It’s easy to use, flexible and doesn’t lockup your tokens.
Users benefit from crypto staking without the need for maintaining staking infrastructure. Stake as many or as few crypto tokens as you want and earn.
Lido does not lock up users’ funds. Don’t worry about your assets being locked up or unstaking periods.
The platform is user-friendly. With a few clicks of a button, you can link supported wallets to Lido, deposit your funds, and start earning.
If you plan to HODL ETH for awhile, it seems like earning an extra 3—4% APY is not a bad idea.