Lido holds around 40% of all ETH on Beacon Chain.
Lido Finance, one of the largest fusion staking providers, has launched on two Layer 2 networks, Arbitrum and Optimism, a move it says will further improve accessibility for Ethereum staking while lowering fees. gas.
The plan to expand to L2 was first disclosed in July when the team acknowledged that several Layer-2 networks had “demonstrated economic activity,” with the new rollout of L2 Arbitrum and Optimism networks launched on October 7.
Lido offers liquid staking, which allows more flexibility for stakeholders as they can withdraw their funds at any time rather than placing Ethereum stakes directly and having it locked up.
Industry leaders such as Coinbase CFO Alesia Haas have previously commented that institutional participation will not take off unless the asset lock-up issue can be resolved. Lido offers this flexible or liquid participation option, which is why it has gained popularity.
The first phase of its Layer 2 implementation enables Lido’s Wrapped Staked Ether (wstETH) token to connect to the two networks.
stETH is the Ethereum liquid staking token that Lido issues in proportion to ETH staked and its wrapped version has a fixed balance of stETH for use in decentralized finance (DeFi) applications that require a constant balancing mechanism.
In addition, Lido will distribute 150,000 Lido DAO (LDO) tokens and rewards per month from launch day for bridged wstETH on each network. The initiative aims to generate WstETH liquidity for farmer incentives in DeFi partners including Balancer, Curve and Kyber Network.
Lido is now at L2️
Connect your deposited ETH to Layer 2 protocols with the click of a button to take advantage of lower gas fees and exciting DeFi opportunities.
— Lido (@LidoFinance) October 6, 2022
According to its website, Lido is worth $7.4 billion in ETH, which is about 5.5 million tokens or about 40% of the total. It was also reported that stETH lost its parity with Ether
earlier this year when the crypto contagion started to spread, but the recovery was quick.
Related: 64% of ETH staked controlled by 5 entities – Nansen
The Layer 2 networks that you chose to implement first have an 80% market share between them.
Arbitrum is the leader with a 51% market share and $2.42 billion in total value locked (TVL) and Optimism has a 30% share and $1.45 billion TVL, according to L2beat.