Lido continues its ascent. Last September, the Ethereum has completed its transition from Proof of Work to Proof of Stake. Among the providers of validator node services is Lido. Lido is a so-called Liquid Staking protocol, which enables ETHs to be staked in a decentralized way. Since its launch, the protocol has grown steadily to become the leading DeFi protocol in terms of TVL.
Lido: the Liquid Staking protocol
Lido is Ethereum’s decentralized finance protocol. It allows users to stash their ETH without locking them. When depositing ETH, the user recovers tokens, which can be used to buy or sell ETH. stETHwhich represent the depot.
These stETH tokens can then be used to obtain more yield or exchanged without having to remove the deposited ETH.
On August 7, the Lido teams published their monthly report on protocol performance in July.
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The unstoppable protocol
Since June 2022, the TVL of the Lido protocol has grown steadily. It has reached $15 billion at the end of July. A level not reached since May 2022, prior to the collapse of Terra Luna.
This growth is all the more impressive considering that the Ethereum network opened up the possibility of withdrawing ETH deposited in staking during the last hard fork. Yet Lido’s TVL has continued to rise, demonstrating user interest in staking on Etehreum.
In total, more than 10,000 new validators chose to use the Lido protocol in July. This represents a 50% increase over June.
On the cash side, the protocol holds 34,415 stETH, 8.5 million DAI and 2.25 million USDT, in addition to LDO tokens. In practice, the protocol continued to convert ETH into stETH, in accordance with a governance decision taken in June.
stETH: the star of L2
A few months ago, Lido set out to deploy its protocol on various Ethereum layer 2s such as Arbitrum and Optimism. To this end, the protocol has created a new token, wstETH, a wrapped version of stETH.
In July, the quantity of wstETH on L2 increased by 12%.from 115,000 to 130,000.
At the same time, following the Curve hack, many Internet users chose to withdraw their stETH from liquidity pools. As a result, the number of stETH deposited in pools fell by 53%, from 343,000 to 160,000.
August forecasts
To round off their report, the Lido teams presented the main lines of development of the protocol for the month of August.
The protocol revealed that it was working on the first community staking module, developed for its Staking Router.
The protocol also finalized its vote for integration into the new Layer 2 Mantle.
Perhaps the protocol will also choose to deploy a version on Base, Coinbase’s L2. This would enable Coinbase to bypass the regulators. U.S. regulators warn Coinbase about its Ethereum staking offer.
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