How can Lido Finance help ETH2 Enthusiasts Benefit from Supporting Ethereum (ETH) on PoS
Lido Finance, a popular staking solution for Ethereum (ETH) and also other leading networks, such as Solana (SOL), Polygon (MATIC), Polkadot (DOT), and Kusama (KSM). As the Ethereum network approaches its big Merge day, Lido is already providing liquidity to ETH 2.0 assets with no limitations imposed.
What is Lido Finance?
Lido was launched in the end 2020, It’s known as one of the most prominent Ethereum staking solutions. The platform does not require 32 ETH for stakers in order to participate in the protocol activities. Users can send any amount of ETH to one of the 21 node providers trusted by Lido and receive a reward in exchange.
Lido Finance not only allows users to stake any amount of ETH but also to deploy tokenized assets (stAssets) on DeFi applications. The intertwined feature has attracted heaps of new activity to Lido.
When stakers deposit ETH through Lido, they receive the desired amount of stETH — the native token, validated with the help of nodes.
Lido makes efforts to make Ethereum staking efficient and profitable for every user and reduce the possible by-effects.
Ethereum staking explained
Cryptocurrency staking is the ability to earn passive income in exchange for locking tokens: an act of earning rewards and keeping the network secure. This way of generating yield has come to the attention of crypto holders around the time the Proof-of-Stake (PoS) consensus mechanism was first introduced. PoS ensures that validators (stakers) get a certain amount of rewards over time for holding the network’s native digital assets and creating verified blocks of data.
If we spaek about Ethereum, the popular network is currently in its last development stages of transitioning from Proof-of-Work to Proof-of-Stake — the process known as the Merge. When staking Ethereum, users are required to deposit 32 ETH in order to get validating abilities through the network’s very own Beacon Chain.
With the Merge coming up next month, Lido might be on its way to dominating Ethereum’s staking ecosystem.
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Lido Finance: Main Features Analyzed
Lido Finance users receive daily staking rewards at a 1:1 ratio, representing ETH and stETH respectively. Lido does not have a minimum deposit or a set lock up period for staking; though, it comes with a 10% yield fee.
The APY decreases as the amount of stETH grows. Nevertheless, the APY is flexible and can change on a frequent basis.
Many analysts line that staking on Lido comes with minimum risks and cons, and the users have the ability to keep full control over their assets.
As of recently, Lido has also introduced L2 staking for stETH. The new upgrade comes with even lower gas fees and a more robust DeFi ecosystem.
