Key Takeaways:

Introduction to the Lido Token

Innovative solutions are continually emerging to address the challenges faced by cryptocurrency market participants. One such solution is the Lido (LDO) token, conceived to aid liquid staking. In this article, we delve into the intricacies of the Lido token, exploring what it is and how it is attempting to revolutionise staking.

Learn more about liquid staking here.

Understanding the Lido (LDO) Token

At its core, Lido, established in 2020, is a liquid staking protocol designed to bring enhanced liquidity and accessibility to staked assets on various Proof of Stake (PoS) blockchains, including Ethereum, and Polygon.

LDO serves as the native governance token of the Lido ecosystem, and it plays a pivotal role in the protocol’s decentralised governance, granting holders the power to influence key decisions regarding the platform’s operations and future development. Holders of LDO tokens actively participate in the protocol’s governance, making it a community-driven endeavour.

How Does Lido (LDO) Work?

Liquid Staking Simplified

Liquidity poses a significant challenge in staking on PoS blockchains, as users can’t withdraw or access tokens until the lockup period ends, limiting their participation in other decentralised finance (DeFi) protocols. Lido addresses this by offering liquid staking, enhancing token liquidity and accessibility. In theory, with liquid staking, users receive tokenised versions of their staked assets (stAsset tokens) on a one-to-one basis. 

In May 2023, Lido launched V2, a new version of its protocol with the goal of even more decentralisation. Key updates included a new Staking Router, which allows anyone to develop on-ramps for new Node Operators, as well as Withdrawal functionality for stETH stakers at a one-to-one ratio. Read more here.

For example, users who stake ETH via Lido will receive stETH that represents their share in the staking pool. stETH and other liquid staking tokens can be traded, transferred freely, or used in DeFi protocols for loans and yield farming (which enables additional yield beyond staking rewards). With liquid staking, users can enjoy the benefits of staking without sacrificing liquidity.

Additionally, Lido’s model enhances security by distributing staked assets across multiple validators, reducing single-point-of-failure risks.

Crypto.com now offers liquid staking. Learn more about how it works.

Decentralised Governance

Lido operates on a decentralised autonomous organisation (DAO) framework. DAOs are entities governed by smart contracts and community-driven decision-making. In Lido’s case, the DAO is responsible for crucial protocol decisions, where holders of LDO tokens actively participate in this governance structure, ensuring that the protocol’s development aligns with the collective interests of its community.

What sets Lido apart is its adaptable voting mechanism. Unlike many other platforms, Lido’s voting system can be independently upgraded and adjusted, providing a flexible approach to governance. This adaptability ensures the protocol can evolve without disrupting its core functions, making it a resilient and responsive platform.

LDO Tokenomics in a Nutshell

Below are LDO facts and figures in one handy overview:

Utility

Allocation

Please note that the specifics of Lido’s tokenomics could change at any time based on the protocol’s governance decisions and evolving needs of the ecosystem. Refer to official Lido documentation and announcements for the most up-to-date information regarding LDO tokenomics.

Pros and Cons of the Lido Token

Benefits of Lido (LDO)

Risks to Consider

How to Trade the Lido Token

Lido (LDO) is listed in the Crypto.com App, joining the growing list of 250-plus supported cryptocurrencies and stablecoins, including Bitcoin (BTC), Ethereum (ETH), Polkadot (DOT), USD Coin (USDC), and Cronos (CRO).

Crypto.com App users can now purchase LDO at true cost with USD, EUR, GBP, and 20-plus other fiat currencies and spend it at over 80 million merchants globally using the Crypto.com Visa Card. Alternatively, users can also trade Lido on the Crypto.com Exchange.

Conclusion

Lido represents a revolutionary step towards democratising staking in the cryptocurrency sphere by providing liquidity to staked assets and empowering the community through decentralised governance.

As users continue to seek accessible and efficient staking solutions, Lido’s role in shaping the future of blockchain technology is poised to become increasingly significant.

Due Diligence and Do Your Own Research

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Liquid Staking With Lido

Lido was conceived to make liquid staking easier and more accessible to crypto users. Here’s how it works.

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