Lido Finance [LDO]the largest platform for liquid staking services on Ethereum [ETH] continues to amaze investors.
Last week, the native token (LDO) rose more than 18% on CoinMarketCap. Even as of press time, LDO was up more than 11%, changing hands at $ 2.15.
But does the platform have more to offer investors / traders?
What do I bring to the table
Over the years, Lido Finance has allowed investors to stake their assets for use on the Ethereum network. And this is not only limited to Ethereum, but also extends to Solana [SOL]Polygon [POLY]and Pois [DOT].
But yes, the aforementioned platform represented the largest liquid derivatives staking (LSD) provider of any protocol on ETH.
Numerically speaking, wWith 4,149,796 ETH staking so far, Lido Finance is the leading pre-merger staking provider.
This represented over 31% of the total ETH wagered in the market at press time.
But that’s not it. Lido has published a proposal to expand the ETH (stETH) footprint in staking to Ethereum’s two largest L2 chains: Optimism and Arbitrum.
Therefore, expanding the episodes of Lido DAO $ ETH (stETH) imprint as elaborated by Messari.
Source: Messari
Meanwhile, to offset the complexity of the stETH token deal, Lido Finance has even incorporated wstETHa wrapped version of stETH. Here, the former was specifically designed for smart contract integrations.
Lido chose to only support wstETH – Wraped Staking Ether – for several reasons, he says. However, he only shared that wstETH offered “simplified bridge contracts and ease of integration, both with bridges and with the general DeFi space”. Hence, the compensation part.
Source: Messari
Thus, the extra support to manage the aforementioned integration arrived: Optimism and Arbitrum. On 18 August Lido Finance unveiled the next step in its expansion plan. The tier 2 targeted networking staking platform mentioned here.
In doing so, it shows its intention to harness the full potential of the Ethereum network through L2.
Ups and downs
After the steady six-month drop in total locked value (TVL) within the DeFi ecosystem, July marked the start of new things as TVL on many protocols began to recover.
At press time, LDO TVL on the DefiLama platform was $ 7.03 billion.
But probably the biggest risk for Lido Finance at this point is trust in derivatives. One of the reasons stETH has been making headlines lately is because it has lost its connection with ETH.
Source: CoinMarketCap
At the time of writing, stETH was priced at $ 1,566, which can be considered a 1.2% discount on ETH ($ 1.65k). This could indicate some pressure on the stETH peg, which has been catalyzed by illicit events, such as the collapse of Celsius and Earth.