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Lido Review in 2024: Pros, Cons, and Features

Last Updated January 19, 2024 12:52 PM
Justin Murphy
Last Updated January 19, 2024 12:52 PM

In this 2024 Lido review, we’re delving into what you need to know about this popular platform.

So, let’s break it down:

  • How user-friendly is Lido?
  • Is your money safe there?
  • And, most importantly, why should a newcomer like you consider it?

Stay with me, and let’s navigate the Lido review in 2024.

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
  • Simple staking system
  • Semi-custodial staking pool service
  • Has a range of crucial security measures

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

  • Clear, intuitive, and user-friendly
  • Provides a streamlined staking system
  • Offers a plethora of staking-related features
  • The site is protected with 256 Bit SSL Encryption
  • Impressive community engagement and social media presence

Cons of Lido

  • Doesn’t cater to US users
  • Limited to staking only 3 coins
  • Lacks a welcome offer for newcomers
  • Exclusive focus on staking without other investment programs
  • Lacks licensing and insurance information

Discovering Lido: Concise Introduction

homepage lido review

Established in 2020, Lido Finance stands as a decentralized liquid staking protocol. It’s headquartered in George Town, Cayman Islands.

It empowers users to stake assets like Ethereum, Solana, Polygon, Polkadot, and Kusama. You can employ staked assets as collateral while reaping rewards from staking and interest through lending.

Additionally, the platform boasts its own native token named LDO. We’ll delve deeper into this, but let’s first grasp the fundamental concept of liquid staking.

Understanding Liquid Staking

Liquid staking revolutionizes the way users stake their cryptocurrencies. It allows for the flexibility to utilize staked assets as collateral for various DeFi endeavors.

In contrast to traditional staking, locked assets gain newfound utility. This is boosting their yield.

Lido: Historical Context

The company was started in 2020 by Konstantin Lomashuk, Vasiliy Shapovalov, and Jordan Fish. Lido Finance emerged with the mission to overcome the limitations of conventional staking. It introduced the innovative concept of liquid staking.

Lido operates as a decentralized autonomous organization (DAO). It includes notable members like Libertus Capital, Semantic VC, StakeFish, and Bitscale Capital.

Noteworthy angel investors include Kain Warwick and Stani Kulechov.

Lido Finance ranks among the foremost staking providers on a global scale, securing billions of dollars in staked assets.

Lido Finance has earned acclaim for its cutting-edge liquid staking solutions. It offers competitive Annual Percentage Rates (APRs) reaching up to 12.9%.

Lido has established a robust DAO and issued derivative tokens. It employs the native utility token, LDO, for governance and fee management.

Lido: Offerings and Functions

Lido Finance provides a diverse range of solutions tailored for individuals interested in staking cryptocurrency. Here’s an extensive overview of what Lido encompasses:

Lido features

Staking with Lido and supported networks

Lido Finance enables users to stake assets on various networks, including:

  • Ethereum
  • Solana
  • Polygon
  • Polkadot
  • Kusama

This offers a broad spectrum of options to cater to different user preferences.

Streamlined staking process

Lido offers a seamless staking process. It allows users to stake and earn daily rewards without any minimum token requirement. This level of flexibility is extended to all users.

Intuitive interface and user-friendly design

Lido’s platform is crafted with accessibility in mind. This makes it an approachable choice even for newcomers to DeFi. Its user-friendly design simplifies the process of staking and managing assets on the platform. New users might benefit from tutorials to grasp the finer details.

Unlocking asset potential

Lido users can maximize the potential of their assets. They can use the assets as collateral for various DeFi activities, including lending and yield farming. This enhances the yield they receive, leading to more substantial returns.

Native token (LDO)

Lido introduces its own native token, LDO, which is tradable on multiple exchanges. Users can engage in LDO trading on platforms such as:

  • SushiSwap
  • Uniswap
  • Hoo
  • 1inch
  • Hotbit
  • DeversiFi
  • Bilaxy

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

Lido offers a semi-custodial staking pool service. This service distributes users’ Ethereum across its validator nodes. The stETH represents a user’s staked ETH. Users have the flexibility to exchange it at any time.

Multichain staking services

Lido extends its staking services to several blockchains, including:

  • Post-Ethereum Merge consensus layer
  • Polygon
  • Kusama
  • Solana
  • Polkadot

This enables users to engage in staking on multiple layer-1 PoS blockchains.

Quality assurance

Lido subjects its smart contracts to rigorous assessments conducted by reputable firms – Quantstamp  and Sigma Prime . These audits serve to guarantee the platform’s security and dependability.

Operational efficiency

Lido provides a simple user interface with seamless functionality. The platform operates with notable efficiency. It ensures users encounter no issues or delays while engaging in cryptocurrency staking.

Stakers can confidently traverse the platform and execute transactions. Managing assets is a straightforward process without encountering significant disruptions or interruptions.

Registration procedure

Lido’s registration process is designed for user-friendliness and simplicity. Users can initiate the staking process effortlessly, devoid of intricate or time-consuming steps.

The platform imposes no extensive Anti-Money Laundering (AML) procedures during registration, streamlining the process for users to commence staking promptly.

A referral option is available. The Lido referral program extends the opportunity to share the benefits of staking and earn LDO tokens.

To qualify for the program, participants must demonstrate the potential to contribute at least 2,500 ETH to Lido over a 12 to 24-month period. Additionally, they should be inclined to promote Lido alongside alternative liquid staking tokens.

Educational resources offered

Lido equips users with a diverse array of educational resources. An “About” section can be found on the official website. This showcases the platform’s mission and devotion.

Furthermore, users can access the latest insights and updates through the platform’s “Blog.”

The website hosts a comprehensive “FAQ” section. This section addresses common user queries and provides answers to improve user navigation.

The platform also provides a “Help Center” for users seeking supplementary guidance. This invaluable resource serves as a central hub for users to seek assistance when needed.

Extensive documentation is readily available on Lido’s website, offering comprehensive insights. It guides on how to optimize the benefits of the platform. All resources are tailored to empower users in confidently pursuing their staking objectives.

Is Lido Safe?

Lido Finance places paramount importance on user safety, implementing a range of crucial security measures, including:

Ongoing code assessments

Lido Finance consistently conducts thorough code reviews to uphold a secure and reliable framework. These reviews foster transparency and proactively identify and rectify potential vulnerabilities.

Utilization of a decentralized autonomous organization (DAO):

Lido Finance leverages a DAO for governance, underscoring its dedication to user security. This approach enables collective and transparent decision-making.

Below, you will find the structure of Lido’s DAO:

Features Description
Research Forum Join the forum and discuss ideas
Key governance proposals Contains all governance decisions and Snapshots
The Lido Herald Monitoring of current votings and proposals

Lido’s DAO

Implementation of a multi-validator system

Unlike conventional practices that involve staking with a single validator, Lido adopts a multi-validator system that decentralizes risk. With over 260,000 validators, Lido effectively disperses risk.

Robust security audits

As previously mentioned, Lido Finance has undergone comprehensive security audits conducted by reputable firms such as Quantstamp, Sigma Prime, and MixBytes. These audits ensure that the platform adheres to rigorous safety protocols.

Recent challenges to the security of Lido DAO (LDO) and staked-Ether (stETH) tokens have come to light.

Reports suggest this arose from a known security vulnerability in LDO’s token  contract.

Lido Finance addressed these concerns, confirming the continued security of LDO and stETH funds. The vulnerability allowed for “fake deposit” attacks, but no on-chain evidence was presented to substantiate any successful exploitation.

Lido also acknowledges several risks associated with staking ETH using liquid staking protocols:

Smart contract security

There exists a potential risk of smart contract vulnerabilities or bugs. Lido’s open-source code undergoes thorough audits and is bolstered by an extensive bug bounty program.

  • ETH – Technical Risk: Lido operates on experimental technology. Potential vulnerabilities in ETH could have an impact on stETH.
  • ETH – Adoption Risk: The value of stETH is tied to ETH adoption and may be subject to fluctuations if ETH does not meet expected adoption levels.
  • Slashing Risk: ETH validators face penalties. Lido mitigates this risk by distributing stakes across multiple reputable node operators and offering additional insurance.
  • stETH Price Risk: Users face the risk of stETH price variations due to withdrawal restrictions on Lido.

Despite these risks, Lido Finance remains proactive in managing and mitigating them. The company is deeply committed to the security and safety of its users and maintains transparency regarding potential vulnerabilities through its blogs.

Lido Fees

Lido Finance upholds a policy of fee transparency. Allow me to provide you with a brief overview:

Fee on staking rewards

When it comes to your staking rewards, Lido applies a 10% fee. This fee is allocated between the node operators and the protocol’s treasury.

It’s worth noting that staking reward fees are a common practice in the realm of staking services. It’s important to be mindful of this 10% deduction from your earnings.

Tax considerations

The earnings you gain from staking with Lido may be subject to taxation, the specifics of which will be contingent on your location. As a decentralized finance platform, Lido may not supply the requisite tax forms for reporting your staking income.

I recommend ensuring compliance with local tax regulations and consulting relevant tax authorities if needed.

Lido DAO token (LDO) withdrawal fee

If you wish to transfer or withdraw Lido DAO Tokens (LDO) to another wallet or exchange, a withdrawal fee may be applicable.

This fee is typically levied by the platform or wallet utilized for the transfer. Its primary aim is to incentivize network nodes (miners) to process and validate the transaction.

The withdrawal fee is commonly denoted in satoshis per byte (sat/b) or gas, and is contingent on prevailing network conditions.

It’s crucial to note that the speed of your transaction is often determined by the fee you opt to pay. Miners prioritize transactions with higher fees for expeditious processing.

Monitoring withdrawals

Keeping tabs on the progress of your Lido DAO Token (LDO) withdrawal is a straightforward process. Simply make use of the provided transaction ID or hash.

You can locate this information in the transaction history section of your wallet. Enter the transaction ID into a blockchain explorer. This will show you the present status of your withdrawal.

Lido Finance upholds a fee structure that is both transparent and straightforward. Users are well-informed about the costs associated with staking and withdrawal activities.

How to Engage in ETH Staking with Lido

stake with lido

Initiating staking for your Ethereum (ETH) with Lido is a straightforward procedure. Follow these uncomplicated steps to begin:

Step 1: Access the official Lido staking portal

Launch your web browser and go to the official Lido staking portal. It is crucial to confirm 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, even including the smallest amounts. 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.

How Lido Operates

Here’s a succinct explanation of Lido’s operations:

  • Batch Staking: Lido protocols consolidate user tokens for staking with validators.
  • Routing to Staking Contracts: These tokens are then directed to network staking contracts.
  • Minting stTokens: Users receive stTokens corresponding to their staked amount, signifying their stake.

Users commence earning staking rewards as their assets contribute to the network. When users opt to unstake, they burn the stToken to initiate the withdrawal process. The withdrawal process adheres to network-specific rules for returning the stake and rewards to the user.

Supported Regions

Lido Finance is a globally inclusive platform, accessible to users across the entire world. Whether you’re situated in North America, South America, Europe, Asia, Africa, Australia, or the Middle East, Lido’s services are at your disposal.

Utilize it for staking and liquid staking on various supported networks, such as Ethereum, Solana, Polygon, Kusama, and Polkadot.

Depositing and Withdrawing Funds

Lido Finance provides a straightforward approach to depositing and withdrawing funds. Below is an overview of these processes:

Deposit methods

Depending on the network you choose to stake with, Lido supports deposits in various cryptocurrencies. These include:

  • Ethereum
  • Solana
  • Polygon
  • Kusama
  • Polkadot

The process of depositing your assets entails linking your wallet to the Lido platform. Subsequently, select the amount of tokens you intend to stake. There are no restrictions on the minimum amount you can stake. This gives you flexibility.

Withdrawal methods

Users have the capability to withdraw their staked assets. They can choose to exchange their staked tokens for the original tokens at any time using the Lido platform.

This withdrawal process is generally straightforward, granting users access to their assets as needed.

Fees

Lido applies a 10% fee on the staking rewards earned by users. This fee is allocated between the node operators and the protocol’s treasury.

Accepted currencies

The accepted currencies for staking on Lido are dependent on the network you select. Primary options include Ethereum, Solana, Polygon, Kusama, and Polkadot.

Limitations

While Lido strives to offer user-friendliness and flexibility, it is crucial to consider associated risks and limitations. These encompass potential smart contract vulnerabilities, fluctuations in staked ETH prices, and risks associated with slashing penalties for validators.

User Assistance and Reviews

Lido Finance is committed to ensuring a positive user experience and provides several avenues for customer support and assistance. Here’s a summary of the support options and the feedback Lido has received:

  • Support Channels: Lido offers users various ways to seek assistance. Some of these include:
  • Assistance Center: Lido’s Help Center serves as a valuable resource, addressing a wide range of user inquiries and concerns. It provides answers to many common questions and offers guidance on platform usage.
  • Frequently Asked Questions (FAQs): The platform boasts a comprehensive FAQ section, acting as a primary resource for addressing common user queries. Users can navigate through these FAQs to find solutions to their questions.
  • Blog: Lido maintains an active blog where users can access detailed articles related to the platform, updates, and relevant information. It’s an excellent resource for staying updated on the latest developments.
  • Documentation: Lido offers informative documentation that provides insights into various aspects of its services, aiming to enhance users’ understanding of the platform.
  • Direct Email Support: For specific or personalized inquiries, users have the option to reach out via email. They can contact the team directly at [email protected].

User feedback

The feedback on Lido’s customer support has generally been positive. Users have appreciated the platform’s dedication to providing extensive resources and documentation, empowering them to find answers independently. However, common feedback and user experiences can be categorized as follows:

Positive feedback

  • Users find the Help Center and FAQs to be thorough and effective.
  • The blog and documentation resources are valued for keeping users well-informed.
  • Users have reported receiving timely and helpful responses when reaching out via email.

Negative feedback

  • Some users have found the platform’s self-help resources to be extensive. This occasionally leads to difficulty in navigation and moments of frustration.
  • A few users expressed a desire for additional customer support channels beyond email, such as live chat or direct messaging options.

Mobile Application Availability

As of now, Lido Finance does not provide a dedicated mobile application for its services. Users can access Lido through its web interface on both mobile devices and computers.

The website is designed to be responsive and user-friendly across various devices, ensuring that users can manage their staking and assets while on the move.

Lido Finance offers a web-based interface accessible on different devices. This is a common option for many DeFi platforms. This prioritizes accessibility and flexibility for its users.

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

What is Lido Finance?

Lido Finance is a decentralized finance (DeFi) protocol. It enables users to earn yield on their digital assets through staking and lending. It operates on the Ethereum blockchain, providing users with a secure and automated method to earn yield on their digital assets.

How does Lido Finance operate?

Lido Finance is a platform that allows users to lend and borrow digital assets, earn interest on deposits, and participate in yield farming. The platform consists of two main components: the Lido Pool and the Lido Bond.

Is Lido considered safe?

Yes, staking ETH with Lido is generally considered safe. Lido is recognized as the largest liquid staking platform in terms of Total Value Locked (TVL). It has over $15 billion in assets.

What are the risks associated with staking on Lido?

The risk of staking on Lido is considered to be low. One important risk to be aware of when staking ETH is the potential for losing staked assets due to slashing.

Can I unstake my ETH on Lido?

Since the launch of Lido v2 on May 16, 2023, users have the option to withdraw or unstake their staked ETH (stETH) through the Lido website.

lido review