Lido is a leading liquid staking protocol designed to make Proof of Stake (PoS) staking more flexible and accessible across multiple layer-1 and layer-2 blockchains. It solves one of the biggest limitations of traditional PoS staking—locked liquidity.
In a typical staking setup, once users commit their tokens to a DeFi protocol, those assets remain inaccessible until the staking period ends. This restriction prevents users from moving funds into other opportunities that may offer better returns. Lido overcomes this challenge by introducing liquidity into the staking process.
Built on the Ethereum blockchain, Lido DAO enables non-custodial liquid staking, allowing users to stake their ETH while still retaining the ability to use its tokenised form across other DeFi platforms. When ETH is staked on Ethereum’s Beacon Chain, it becomes locked—but through Lido, these locked assets are converted into liquid staking tokens, unlocking new earning opportunities. This innovation not only boosts capital efficiency but has also helped drive greater retail participation by making staking more flexible, rewarding, and user-friendly.
What is Lido DAO token (LDO)?
Lido operates through a Decentralised Autonomous Organisation (DAO), where decision-making is guided by a community-led, non-hierarchical governance model rather than centralized control. The Lido token (LDO) serves as the protocol’s governance token, giving holders the power to vote on important matters such as protocol upgrades, strategic initiatives, treasury decisions, and proposed changes to the DAO’s structure.
Governance within the Lido ecosystem is supported by several prominent contributors from the crypto industry. Key participants include Semantic Ventures, KR1, and P2P Capital—well-known entities that play an active role in shaping the protocol’s growth and long-term direction.
Read more: What is DAO
Lido Tokenomics
As of December 4, 2025, the Lido DAO (LDO) token is priced at $0.6507. It has a fixed total supply of 1 billion tokens, with a market capitalisation of approximately $580.50 million. The token also recorded a 24-hour trading volume of $64.73 million.
How Does the Lido DAO Platform Work?
The workings of the platform can be explained in a simple three-step process:
Staking: Users can stake any amount of ETH they wish to on the Lido Platform. Lido receives the staked ETH.
Minting: In exchange for the ETH stakes, users can avail the derivate token of Lido DAO known as sETH (liquid asset).
Yield using sETH: The sETH availed by the users can be used for staking across multiple DeFi protocols, thereby opening up more investment opportunities.
Key Features of Lido DAO
Lido Staking platform
It allows users to connect their crypto wallet and stake any amount of ETH. Once the ETH is staked, sETH is received in a 1:1 ratio. A 10% transaction cost is deducted from the returns obtained by the users on staking their sETH.
Maker DAO
MakerDAO lets users borrow DAI by locking sETH as collateral without selling their holdings. This allows them to access liquidity while still maintaining exposure to Ethereum’s price movement.
Curve DAO
sETH can also be used within the Curve DAO ecosystem. Curve allows users to swap and access stablecoins efficiently using sETH as part of its liquidity pools.
Pros and Cons of Lido
| Pros | Cons |
| Offers a unique flexibility option in Staking | The 10% fee on the Lido platform is high |
| Fully Decentralised | Highly dependent on Ethereum |
Pros
Unique Staking Option
The unique feature to provide liquidity for ETH tokens is an attractive proposition. This feature is seen to garner a lot of attention from retail investors who do not want to lock their funds for long periods.
Fully Decentralised
The best part about a DAO is the ability to not have a single point of failure. Each member of a DAO has a voice and a voting right. This makes the entire system democratic.
Cons
High Fee
A 10% fee on the returns earned by investors is considered relatively high and can have a noticeable impact on overall profitability. Over time, such a charge can significantly reduce net gains, especially for long-term participants who rely on compounding to grow their investments.
Dependency
Lido DAO and its tokens are highly dependent on the Ethereum blockchain. Any threats that the Ethereum blockchain faces can have a direct impact on the workings of the DAO and the value of the governance token.
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FAQs on Lido DAO
How does the Lido DAO liquid staking protocol work?
Lido allows users to stake their ETH and other PoS assets through its protocol and receive liquid staking tokens (like stETH or sETH) in return. These tokens represent the staked assets and continue earning staking rewards while remaining usable across DeFi platforms.
What problem does Lido DAO solve in the staking ecosystem?
Lido solves the issue of illiquidity in traditional staking. Normally, staked assets are locked and cannot be used elsewhere, but Lido enables users to keep their assets liquid while still earning staking rewards.
What is the LDO token used for?
The LDO token is Lido’s governance token. It is used for voting on protocol upgrades, fee structures, validator selection, treasury management, and other key decisions within the Lido DAO ecosystem.
How does Lido DAO enable liquidity for staked ETH?
When users stake ETH on Lido, they receive a liquid token like stETH or sETH in return. This token can be traded, lent, borrowed, or used in DeFi while the original ETH remains staked and continues earning rewards.
