Lido Cryptocurrency: Everything You Need to Know About Liquid Staking and its Use Cases

Lido: Everything You Need to Know

Lido is a decentralized, open-source platform that aims to provide a secure, transparent and fair way to access staking services using blockchain technology. Lido leverages smart contracts and peer-to-peer networks to create a global marketplace for staking products. In this article, we will explore what lido is, how it works, who is behind it and what are its use cases.

What is Lido?

Lido [LDO] is the native cryptocurrency token of Lido Network, a blockchain network that runs on the Binance Smart Chain (BSC) and supports the Ethereum Virtual Machine (EVM). This means that Lido is compatible with both the BSC and Ethereum ecosystems, allowing developers to easily port their applications from Ethereum to Lido and vice versa. Lido also benefits from the interoperability and scalability features of BSC, such as the cross-chain communication protocol and the proof-of-staked-authority consensus mechanism.

Lido was launched by Lido Labs in October 2021 as a way to disrupt the traditional staking industry and offer more opportunities for innovation and inclusion. Lido Labs is a social enterprise that aims to use blockchain technology to solve real-world problems and create positive social impact. Lido Labs believes that staking is a basic human right that should be accessible to anyone, regardless of their technical skills or financial resources.

Lido enables users to stake their crypto assets and receive liquid staking tokens in return, which represent the user’s staked assets and staking rewards. These tokens can be used across various decentralized applications (DApps) to compound more returns or access other services. Lido currently supports liquid staking for coins of five blockchains: Ethereum, Solana, Polygon, Polkadot, and Kusama.

How does Lido work?

Lido works as a bridge between users and validators, who are nodes that secure and operate the underlying blockchains. Users can deposit their crypto assets into Lido’s smart contracts and receive corresponding liquid staking tokens in return. For example, users can stake their ETH and receive stETH (Lido staked ETH) tokens, which track the value of the staked ETH plus the staking rewards.

Validators are selected by Lido’s governance system, which consists of LDO token holders and node operators. Validators are responsible for running the nodes, processing transactions, creating blocks and distributing rewards. Validators are also required to stake LDO tokens as collateral to ensure their reliability and commitment.

Lido relies on cryptographic proofs to verify the integrity and availability of the data stored on the network. These proofs include Proof-of-Replication (PoRep), which proves that a validator has stored a unique copy of a user’s data, and Proof-of-Spacetime (PoSt), which proves that a validator has continuously stored a user’s data for a specified period of time.

Who is behind Lido?

Lido was established by Konstantin Lomashuk, Vasiliy Shapovalov and Jordan Fish in 2020. The organization was helped to launch by a collective of financial firms and angel investors. The finance firms include Semantic VC, ParaFi Capital, Libertus Capital, Bitscale Capital, StakeFish, StakingFacilities, Chorus, P2P Capital and KR1. The handful of angel investors who also helped Lido get off the ground include Stani Kulechov of Aave, Banteg of Yearn, Will Harborne of Deversifi, Julien Bouteloup of Stake Capital and Kain Warwick of Synthetix.

What are the use cases of Lido?

Lido has various use cases in the field of decentralized staking, as it enables users to stake their crypto assets in a secure, transparent and fair way. Some of the main use cases are:

Passive income: Lido allows users to earn passive income from their crypto assets by receiving staking rewards in the form of liquid staking tokens.

Liquidity: Lido provides users with liquidity for their staked assets by allowing them to trade or transfer their liquid staking tokens at any time.

DeFi: Lido enables users to access various DeFi services using their liquid staking tokens, such as lending, borrowing, swapping or farming.

Governance: Lido empowers users to participate in the governance of the platform by holding or delegating their LDO tokens and voting on key decisions.

Security: Lido enhances the security of the underlying blockchains by increasing their decentralization and resilience against attacks.

Conclusion

Lido is a decentralized platform that enables users to stake their crypto assets and receive liquid staking tokens in return. Lido supports liquid staking for coins of multiple blockchains, such as Ethereum, Solana, Polygon, Polkadot and Kusama. Lido is powered by smart contracts, peer-to-peer networks and cryptographic proofs. LDO is the native token of Lido, which is used for governance and collateral purposes. Lido has various use cases in the field of decentralized staking, such as passive income, liquidity, DeFi, governance and security.