Protocol Explainer Series: Lido
Lido is a Liquid Staking protocol that redefines the boundaries of liquidity and usability in DeFi, by opening new possibilities for users who not only want to stake their ETH, but also continue to maintain liquidity and potentially use it for other applications like leveraged yield farming.
Following our exploration of Gearbox in the second edition of the Protocol Explainer Series, we now unveil the revolutionary features of Lido in this comprehensive guide. Let’s dive right in!
Navigating the Lido Experience
Traditional Ethereum solo staking requires that the user has a minimum of 32 Ether (ETH) before they can start to run a node and receive full participation rewards. However, not everyone is able to conjure 32 ETH at a moment’s notice due to obviously high minimum price required — solo staking would set you back at least $30,000 at current prices!
Because of this fundamental reason, Lido was created. Lido opens doors to a straightforward and efficient way of staking tokens like Ether and Solana (SOL), ensuring that each and everyone of us can participate no matter the requirements set forth.
It stands as an embodiment of fluidity and adaptability, enabling your tokens to break the constraints of traditional staking, fostering enhanced liquidity and participation across the DeFi ecosystem.
Diving into the core functionalities that propel Lido to the forefront:
- Liquid Staking:
Staking with Lido is uncomplicated. It removes the hurdles and complexities often associated with the process. When you stake your tokens with Lido, they don’t get locked away. Instead, you receive stETH, which is a representation of ETH that is staked, is liquid and which you are free to use across various dApps.
- Accessibility:
Lido is inclusive, welcoming everyone, regardless of the size of their token holdings. You don’t require a minimum of 32 ETH just to stake your ETH for staking rewards — imagine that! It allows a broader audience to participate, making staking accessible to a wide range of users who might only have 0.01 ETH to reap rewards from staking.
- Seamless Integration with DeFi:
Lido also stands out with its seamless integration into the broader DeFi ecosystem. The stETH tokens you receive are versatile, enabling you to interact with various DeFi platforms and maximize the utility of your staked assets. Imagine passively earning participation rewards in the Ethereum ecosystem, and also leveraging it for further yield in other projects that utilizes stETH. Win-win.
Before we go into the point of leveraging stETH for further yield in the next section by using Dezy’s Builder, here’s a quick explainer on how Lido works:
Dezy’s Builder Meets Lido
With Dezy’s Builder, your interaction with Lido becomes a smooth and enriched experience. The Builder acts as a bridge, allowing you to seamlessly incorporate Lido’s staking functionalities into a unified strategy. Imagine wanting to stake your Ethereum (ETH). With the integration of Dezy’s Builder and Lido, you can effortlessly stake your ETH, receive stETH (Lido’s staked ETH) in return, and then use these stETH tokens in various DeFi applications, all from a single interface.
For example, after staking your ETH on Lido via Dezy’s Builder, you can utilize the received stETH as collateral in a lending protocol or even earn additional yields by participating in liquidity provision or yield farming strategies.
This streamlined process not only simplifies your interaction but also optimizes your strategies, ensuring you make the most out of the staking and DeFi opportunities available.
Check out the example strategy below:
In Conclusion
Lido revolutionizes the staking landscape, giving flexibility and optimized returns in DeFi. It reshapes how staking works, making it more accessible, adaptable, and integrated with the broader DeFi ecosystem.
By leveraging Lido’s capabilities within Dezy’s Builder, users can experience a harmonized and enhanced workflow, simplifying the complexities traditionally associated with staking and the potential of further DeFi engagements post-staking.
In embracing this dynamic duo, the boundaries of what you can achieve in the DeFi space expand, enabling a more seamless and productive navigation of the DeFi terrain. Dive into Lido’s integration within Dezy’s Builder, and unfold the multitude of possibilities to optimize your staking and DeFi strategies!
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About Dezy
Dezy brings the power of DeFi to your fingertips enabling you to access more while doing less. Generate yield, batch transactions, earn fees, dollar cost average and more from a simple to use interface.
We believe simple is better and that making DeFi more accessible benefits all market participants. Whether you are native to the space or just getting started, Dezy offers something for you to make your DeFi experience more efficient and rewarding.
