Fees on Ethereum are low today, but Lido Finance wants to keep them low tomorrow.
The so-called liquid staking service has announced that it will begin expanding into various layer-2 scaling solutions for the Ethereum network.
“For Ethereum stakers, this means staking with lower fees and access to a new suite of DeFi applications to amplify yields,” the project explained in a statement yesterday.
Lido Finance solves a key bottleneck for many users when it comes to staking their Ethereum.
Typically, when you want to participate in staking on Ethereum (as part of its transition to a proof-of-stake network), you’d need to cough up 32 ETH, or roughly $50,000 at press time.
For the less ETH-wealthy among us, Lido lets you stake any amount they want and still earn a yield for doing so. Today, you can earn just under 4% for staking with the platform.
The service has become beloved among crypto enthusiasts too, with Lido dominating market share.
What’s more (and here’s where the liquid staking terminology comes from), you receive a “Staked Ethereum” token in return called “stETH,” keeping you liquid even with your precious Ethereum locked up.
You can then take this stETH and deposit it on Aave for additional yield or even use it as collateral to mint the stablecoin DAI on MakerDAO.
But, as seen in the past, these additional operations can come with a cost; hence Lido’s move to expand into cheaper, speedier alternatives.
Lido takes first steps towards scaling solutions
Though the Lido team is intent on “making Lido’s staked-asset tokens widely available throughout Ethereum Layer 2,” it’ll first start small by integrating crypto wallet Argent and making “wstETH available on zkSync users and with Aztec.”
Briefly: wstETH is yet another wrapped version of stETH that’s more compatible with a wider array of decentralized finance (DeFi) projects; Argent is a user-friendly crypto wallet that has integrated the layer-two solution zkSync; and Aztec is another privacy-centric Ethereum scaler.
With Lido already leading the market for this service, its push into layer-2 options may firm up that lead.
If not now, then perhaps during the next bull run when gas fees hit new all-time highs.