Lido is a popular liquid staking platform offering unique features and fees that make it stand out from the crowded DeFi market. It quickly rose to fame thanks to authentic approach to staking cryptocurrencies that many Lido reviews find unique on the market. However, we don't take these reports for granted and did our best to check and test everything by ourselves.
If you're interested in passive crypto income, check our Lido review below to learn how to stake Ethereum or Polygon. Note that Lido offers liquid staking and a way to bypass the high ETH staking entry. This type of staking is quite appealing to all investors, both newbies and seasoned, as they can maintain their trading activities even during the staking period.
Disclaimer: The information provided on this website is for informational purposes only and should not be considered as financial, investment, or legal advice. Cryptocurrency investments are volatile and high-risk in nature. Consult with a qualified financial advisor and/or tax professional before making any investment decisions. We are not responsible for any loss incurred due to the use of information on this website. Do your own research and exercise caution. Don’t invest unless you’re prepared to lose all the money you invest.
Key Takeaways
- Lido is a semi-custodial liquid staking platform
- Stakers get stTokens for the coins they stake, thus staying liquid
- Users can batch the staked coins together to bypass high ETH entry barriers
- Uses a multi-validator to distribute risk and improve security
- Enhances security through regular audits and code assessments
- Governed by a DAO that makes decisions and keeps things decentralized
Pros and Cons of Lido
Lido is a platform with different features than what you’re used to. You should be aware of it before signing up. That’s why our team prepared a list Lido pros and cons to keep you posted:
Pros of Lido
- Supports two large blockchain networks (ETH & MATIC)
- Supports a wide range of compatible wallets
- Has no minimum staking requirement
- Allows stakers to stay liquid while staking
- Straightforward and transparent fee structure
- Beginner-friendly and easy to use
Cons of Lido
- Staking is limited to only 2 coins
- Lacks a welcome offer for newcomers
- Exclusive focus on staking without other investment programs
- Lacks licensing and insurance information
Discovering Lido: Concise Introduction
Launched by a group of developers and staking infrastructure providers in December 2020, Lido is one of the most popular liquid staking platforms in the DeFi space. Although it is run as a decentralized autonomous organization, Lido became popular for its innovative approach to staking, which allows users to earn rewards while maintaining liquidity.
Lido’s flexible tokenization process was quickly recognized by the crypto community, particularly users interested in staking Ethereum 2.0. It allowed them to remain liquid while staking the coin, which was a welcome solution to ETH’s high entry barrier and long lock-up staking requirement.
What is Liquid Staking?
Liquid staking is a flexible alternative to conventional staking, designed to help stakers maintain the liquidity of their assets when they are staked.
In conventional staking, the staked coins are practically locked up and out of the staker’s reach for the entire staking period. This means that in order to receive staking rewards, the staker must commit to locking up the coins they stake, and not be able to access or use them for other purposes.
In liquid staking, the staked coins also remain locked up, but the staker is provided with liquid staking tokens (LST) that represent the coins they staked. The staker can use these LSTs the same way they would use the original assets, thereby remaining liquid for the duration of the staking period while receiving the staking rewards.
For example, a staker may choose to trade their LST while the original asset it represents is still locked up. Once the staking period is over, the original asset will go to the user who currently holds the LST.
Lido Offerings and Features
Lido Finance provides a diverse range of solutions tailored for individuals interested in staking cryptocurrency. Here's an extensive overview of what Lido encompasses:
Staking with Lido and supported networks
While many staking platforms commonly choose to focus on a single network, Lido goes a step beyond and currently supports two major blockchains and their native coins:
- Ethereum (ETH)
- Polygon (MATIC)
Not that long ago, Lido also supported three other networks - Solana, Polkadot, and Kusama. However, these services have been discontinued due to a strategic decision made by the platform.
Streamlined staking process
Unlike many traditional staking platforms, beginning the staking process on Lido is quite streamlined and straightforward. The platform supports several popular crypto wallets, including MetaMask, Trust Wallet, and Ledger, which the staker can easily connect and stake their coins immediately.
No complex procedures or technical configuration are involved, and the entire experience of staking on Lido is hassle-free.
One of Lido’s standout features is “Auto Compounding,” which allows users to reinvest their staking rewards automatically, as soon as they receive them, without human intervention.
Intuitive interface and user-friendly design
Lido has a clear and uncluttered interface, which makes navigating and getting from one point to another simple and intuitive. There are also clear and helpful instructions on nearly every page of the platform that guide users through each step of the staking process.
While Lido doesn’t have a dedicated mobile app, it can be accessed through several popular mobile wallets, simplifying the staking experience from a mobile device.
Additionally, the platform integrates with over 100 projects across the broader DeFi ecosystem and enables users to engage in various financial activities beyond just staking.
Unlocking asset potential
As previously mentioned, Lido specializes in liquid staking, and this is the platform’s bread and butter. By remaining liquid during the staking period, you essentially unlock the full earning potential of your coins and have the opportunity to participate in other DeFi activities without sacrificing your staking rewards.
When you stake your coins on Lido, you receive LSTs called stTokens that represent the coins you staked. For example, if you stake 1 ETH, you receive 1 stETH from the platform to remain liquid.
Now, your ETH will remain staked in Lido, and you will receive the staking rewards it yields. At the same time, you will have 1 stETH that you can use in other profitable activities, like lending, providing liquidity, or even trading, to maximize your earning potential.
Native token (LDO)
Lido DAO’s native cryptocurrency, LDO, was initially launched as a governance token, but over time, the coin has grown into a key asset in the DeFi ecosystem. In addition to enabling community participation, like voting on protocol upgrades, LDO can now even be staked for rewards.
At the moment of writing, LDO is listed on more than 50 centralized crypto exchanges, including major CEXs such as:
- Binance
- Coinbase
- OKX
- Gemini
- Kraken
- Crypto.com
- KuCoin
- BingX
While LDO’s price has been incredibly volatile, its growth potential is undeniable. As the entire Lido ecosystem expands in the DeFi space, we can only expect that LDO’s value will continue to rise alongside its increasing utility and adoption.
Supported wallets
Lido does not provide its own wallet. Luckily, it seamlessly integrates with popular DeFi wallets like TrustWallet and MetaMask. This allows users to manage their assets using trusted wallets, adding an extra layer of convenience.
Semi-custodial staking service
In terms of asset management, Lido classifies its staking services as semi-custodial, as in something in between the two main types of staking, non-custodial and custodial.
In non-custodial staking, stakers maintain full control over the staked assets and their private keys. However, managing a non-custodial staking environment is a fairly complicated process that requires an advanced understanding of blockchain technology and a high-end hardware setup, making it less accessible to the average crypto user.
Custodial staking, on the other hand, is easy to set up, requires minimal technical knowledge, and liberates the staker from the burden of managing the staking process. The drawback is that the user must entrust the staking platform with full control over their crypto assets, opening the door to all kinds of security and mismanagement risks.
Lido takes a hybrid approach that balances the ease and security of custodial staking with the control and flexibility of non-custodial staking. When staking with this platform, users retain ownership and control over their assets and only delegate the staking operations, such as validator selection and reward distribution, to Lido’s decentralized network of node operators.
Multichain staking services
Lido extends its staking services to several blockchains, including:
- Unichain
- Optimism Mainnet
- Arbitrum
- Base
- Scroll
- BNB Chain
- ZKsync
- Linea
- Polygon PoS
- Soneium
- Mode
- Mantle
- Zircuit
This enables users to engage in staking on multiple layer-1 PoS blockchains.
Quality assurance
As a staking platform handling users' assets, integrity, reliability, and quality assurance are particularly important focus areas for Lido. There are several components to the platform’s quality assurance framework, including:
- Decentralized Validator Network: For obvious reasons, the integrity of the validators is critical in a staking platform such as Lido. To ensure security and optimal performance, the Lido DAO carefully selects and oversees the platform’s validator network.
- Regular Security Audits: To identify and mitigate vulnerabilities in its smart contracts, Lido regularly undergoes security audits conducted by reputable third-party firms, such as Ackee, Certora, ChainSecurity, Hexens, Sanity Checker, MixBytes, Oxorio, Pessimistic, QSP, Sigma Prime, and Statemind.
- Insurance Fund: While it is not a traditional insurance fund with a regulated insurance provider, Lido does keep a smart contract reserve specifically designed to compensate users in case of slashing events or other staking-related risks.
- Oracle System: To maintain the transparency and accuracy of the staking process, Lido uses a system of oracles that provides data on the balances and rewards in real time.
Most importantly, Lido operates as a DAO , meaning LDO token holders must approve every platform decision. This community-driven model ensures that Lido operates with integrity and that its choices are in the best interest of everyone involved.
Registration procedure
Unlike most centralized platforms, as a DeFi platform, Lido does not require lengthy registration and verification procedures. It doesn’t require your name, email, phone number, and other personal data.
All you need to do is tap or click on the “Stake” buttons, enter the amount you want to stake, connect your crypto wallet, and confirm the transaction. You can begin staking with Lido in minutes, with no account activations, KYC verifications, and other bothersome steps.
Educational resources offered
As any reputable financial platform, Lido offers its users tons of knowledge and educational resources for free on its staking platform. Under the “Learn” tab on Lido’s homepage, users can access three educational pages, “Blog,” “FAQ,” and “Help Center.”
The blog is both educational and informative. It acts as the weekly newsletter for Lido’s staking platform but also covers news for the Lido DAO and other important crypto market developments. It has the most content out of the three pages, and in addition to news, it also provides reports, reviews, expert assessments, and other information you may find useful.
The FAQ section is quite extensive and answers commonly asked questions about using the Lido staking platform and liquid staking in general. It is neatly categorized and allows easy navigation between topics.
The help center focuses on staking and has a large number of short and straightforward guides on how to do different things on the platform.
Is Lido Safe?
As a platform that manages custodial assets, safety and security are of paramount importance to Lido, demonstrated by its robust governance and oversight mechanisms. The platform frequently assesses the integrity of its codebase with rigorous security audits and the effectiveness of its operations through the utilization of its DAO’s community-driven governance.
Ongoing code assessments
In addition to the security audits mentioned earlier, Lido conducts comprehensive code assessments that thoroughly review its smart contracts and their underlying infrastructure. Through these assessments, the platform ensures quality and security of its codebase and overall system, emphasizing Lido’s commitment to providing a safe and reliable staking experience for its users.
Lido's DAO
A DAO, or a decentralized autonomous organization, is a blockchain-based entity that operates with no central authority, but instead, makes decisions based on community votes. This is a governance model commonly used in DeFi space, and Lido is one of the most prominent examples of it.
Utilization of a decentralized autonomous organization (DAO):
Lido’s dual function as a staking pool and a DAO drastically enhances its security as a platform. By distributing the power to make decisions across an entire decentralized community, Lido’s DAO promotes accountability and transparency. In addition, its flexible governance structure allows for quick response to ever-evolving security threats, and ensures any vulnerabilities are quickly addressed.
Here is the current governance structure of Lido’s DAO:
| Features | Description |
|---|---|
| Aragon Framework | Utilized for on-chain governance, it executes key operations such as updating smart contracts and managing fund transfers. |
| Snapshot Voting | Off-chain voting stage that requires a minimum of 1,000 LDO tokens to submit a proposal. A quorum of 5% of the total supply is needed. |
| On-Chain Voting | Formal voting process that uses the Aragon framework. It lasts 72 hours and requires a simple majority to pass if the quorum is met. |
| Emergency Track | Allows urgent proposals to bypass the usual stages and go directly to on-chain voting. |
| Easy Track | Simplified process for routine proposals. Authorized addresses can initiate motions, which typically last 72 hours. |
| Committees | Specialized groups within the DAO manage areas such as node operator oversight and liquidity provisioning. |
Implementation of a multi-validator system
Lido’s multi-validator system is one of the most important components in its decentralized protocol and a key contributor to the platform’s security and overall success. Instead of relying on a single validator, Lido reduces the risk of centralization and validation failure by distributing the staked coins to multiple validators.
This approach achieves three things:
- Ensures that transactions are validated more efficiently
- If one node operator fails, the others can continue operating
- Promotes decentralization and trust among network participants
Robust security audits
As previously mentioned, Lido regularly conducts security audits to ensure that its smart contracts remain secure and free from vulnerabilities. At the moment of writing, Lido has undergone more than 50 audits conducted by various reputable third-party security firms.
Such a comprehensive audit history speaks volumes about the organization’s commitment to maintaining the highest level of security. With each subsequent audit, Lido enhances its protocol security even further and decreases the number of vulnerabilities in its infrastructure.
Lido also acknowledges several risks associated with staking ETH using liquid staking protocols.
Smart contract security
Smart contracts are pieces of software that are commonly used on blockchain networks. These contracts have the terms of agreement hardcoded into their code and execute automatically when both sides fulfill them. Their ability to self-execute and avoid intermediation is precisely what makes them reliable for DeFi platforms like Lido.
While smart contracts are prone to vulnerabilities, Lido does well in addressing them promptly by regularly conducting audits and ongoing code assessments. Moreover, the involvement of the entire Lido DAO community enhances their security by constantly monitoring and quickly addressing potential risks through decentralized governance.
Lido Fees
Lido’s fee structure is straightforward and transparent and does well to inform the staker exactly how much of their staking rewards it will deduct for using the service.
Fee on staking rewards
When you stake your assets through Lido, the platform will charge you 10% of your staking rewards as a service fee. The fee is fixed at 10% and doesn’t change depending on the staked amount or other factors. In addition, you will also incur transaction costs, also known as gas fees, which are charged by the underlying blockchain network to process the transactions.
It is worth noting that all the revenues that Lido generates through the 10% fee are split between the node operators and the Lido DAO treasury.
How to Start Staking ETH with Lido
As previously mentioned, Lido has no registration process and allows users to start staking in a matter of minutes after landing on its homepage. To make sure you do everything right, here is a brief guide that will show you exactly how to do this.
Step 1: Access the official Lido staking portal
Launch your web browser and go to the official Lido staking portal. It is crucial to verify that you are on the correct website. The official URL is stake.lido.fi . Exercise caution and double-check the URL to mitigate potential security risks.
Step 2: Connect your ETH wallet
Once you're on the Lido staking portal, locate and click the "Connect Wallet" button. Lido accommodates various Ethereum wallets, including well-known options like Metamask, MyEtherWallet, and others.
Select your preferred wallet to establish a secure connection. Upon successful connection, you will be able to view your ETH balance within the Lido platform.
Step 3: Specify your staking amount
Lido affords you the flexibility to stake any quantity of ETH, as it doesn’t have a minimum stake limit. Simply input the ETH amount you wish to stake and click the “Stake” button.
Bear in mind that gas fees may be applicable to the transaction. In certain instances, staking a larger ETH amount can be more cost-effective. However, the ultimate decision rests on your preferences and goals.
Step 4: Validate the transaction
Upon clicking the "Stake" button, your wallet will prompt you with a transaction validation. Review the transaction details and confirm to proceed. This action sets the staking process in motion.
Step 5: Acquire stETH rewards
Following validation, your wallet will receive stETH tokens, representing your staked ETH on the Ethereum mainnet. Your stETH balance will increment automatically as you accrue daily staking rewards.
Lido Staking Options
Here's a succinct explanation of Lido's operations:
- Batch Staking refers to the process of pooling coins from multiple users together before staking them with validators on the network. This bundling allows users to stake a low amount of ETH without meeting the dreaded 32 ETH requirement.
- Routing to Staking Contracts: After batching them together, the coins are properly allocated to the appropriate network staking contracts and assigned to validators to earn rewards.
- Minting stTokens: Once the coins are staked, Lido mints corresponding stTokens with a 1:1 peg and provides them to the staker.
As the staked coins contribute to the network, the staker receives staking rewards. If the staker decides to unstake coins, their corresponding stTokens will be burned, and the coins they staked, along with all the staking rewards, will be returned to their wallet.
Supported Regions
The Lido liquid staking platform can be accessed from almost everywhere in the world. The platform imposes no geographical restrictions, and as long as it is in compliance with local regulations, you should be able to access it from anywhere.
Depositing and Withdrawing Funds
Having covered the staking process, security measures, and core features Lido has to offer, it is time we turn our attention to making deposits and withdrawals on the platform.
Deposit methods
To make a deposit and start staking on Lido, you will need to connect a compatible crypto wallet that supports Ethereum-based tokens and integrates with Web3 applications. Lido supports a wide range of crypto wallets, including popular choices such as:
- MetaMask
- Trust Wallet
- Ledger
- OKX Wallet
- Coinbase Wallet
- WalletConnect
- Exodus
- Ambire
Once you connect a wallet and enter the amount of coins you want to stake, they will be transferred to Lido's staking pool and stToken counterparts will be minted and sent to your wallet. This is the only way to make a deposit to Lido.
Withdrawal methods
To withdraw your staked coins from the Lido platform, you need to initiate a withdrawal. The process is similar to making a deposit and involves connecting your crypto wallet and entering the amount of coins you want to withdraw.
Once your withdrawal request is processed, your stTokens will be burned and the staked coins will be unstaked and transferred back to your crypto wallet, alongside the staking rewards. Once again, this is the only way to withdraw your funds.
Fees
Apart from the 10% staking fee, Lido has no other charges, including deposit and withdrawal fees. However, keep in mind that you will incur gas fees charged by the coin's native blockchain network for any transaction you make with your coins.
Accepted currencies
Lido only accepts the two crypto coins at the moment, ETH and MATIC.
Limitations
Lido is quite a versatile platform. While it has some limitations, they are not too restrictive and allow for a broad range of staking opportunities.
In terms of network support, Lido supports two of the most popular blockchain networks in the world, Ethereum and Polygon, which encapsulate a great portion of the crypto community.
Keep in mind that many platforms only allow staking on a single network, which can significantly limit their staking flexibility.
Moreover, the range of wallets compatible with Lido is extensive, precisely because Ethereum and Polygon are the two most popular networks, making their wallets widely supported.
Finally, because it can batch coins in a pooled manner, Lido imposes no minimum stake limit, which is one of the platform's biggest advantages. This inclusivity allows every user to participate in staking, regardless of how little ETH they own.
In comparison, the direct staking requirement for Ethereum is 32 ETH, which is quite expensive for small-scale investors.
Final Thoughts on Lido
Lido Finance stands as a significant player in the realm of decentralized liquid staking protocols. Lido Finance excels in delivering top-tier staking services. It features a user-friendly interface, competitive fee structures, and an enticing referral rewards program. The platform is dedicated to providing liquidity to staked ETH and is supported by industry leaders.
However, it's essential to approach Lido with caution, considering the risks associated with cryptocurrency investments. The platform's fee transparency, security measures, and commitment to user safety are commendable, yet recent challenges with security vulnerabilities in the LDO token contract serve as a reminder of potential risks.
Frequently Asked Questions
Is Lido a reliable platform for staking?
Lido is considered a reliable and secure staking platform for several reasons. First, the platform is governed by a DAO, which ensures it operates transparently and puts all decisions to a vote. Second, the platform uses a multi-validator approach to its staking operations, which diversifies the risk and security of the staked assets. Finally, Lido undergoes frequent audits and code assessments, where potential vulnerabilities are promptly identified and addressed.
How can I participate in Lido staking?
To stake on Lido, you must own cryptocurrencies and a wallet that the network supports. First, connect your wallet to Lido, then enter the amount of ETH or MATIC you want to stake, and let the platform do the rest.
What kind of returns can I expect from staking with Lido?
The current advertised APR on Lido’s official website is 2.8%. As with any financial investment product, this percentage is only an estimate, and the actual returns can vary depending on the specific network conditions, validator performance, and the overall market volatility.
Can I unstake my assets from Lido anytime?
The current advertised APR on Lido’s official website is 2.8%. As with any financial investment product, this percentage is only an estimate, and the actual returns can vary depending on the specific network conditions, validator performance, and overall market volatility.
What are the risks involved in staking at Lido?
The risks involved in staking at Lido are more or less the same risks involved in staking at any staking platform. There is always the chance that a validator may misbehave, commonly known as the risk of slashing. There is also the risk of smart contract vulnerabilities, which could potentially lead to loss of funds if exploited. Finally, there is always the omnipresent risk of market volatility, which affects all cryptocurrency investments, not only staking.
