Lido is a secure liquid staking protocol that supports several layer-1 and layer-2 cryptos that use the Proof of Stake (POS) consensus mechanism. It addresses a fundamental problem plaguing the current POS staking system.
One of the critical challenges of the staking ecosystem is illiquidity. Once a user stakes their assets in a Defi protocol, they cannot reaccess their tokens till the staking period is over. This hampers users to access platforms which have better returns. Lido DAO provides a solution to this problem.
Lido DAO is a liquid staking protocol which works on the Ethereum blockchain. It enables non-custodial staking which means users can stake their locked Ethereum into other protocols. The staking on Ethereum’s beacon chain locks the assets. Lido DAO allows these assets to be liquified. This gives the chance for users to gain more returns. Lido DAO is also known to have encouraged more retail participation because of its unique features.
What is Lido DAO token (LDO)?
Lido works on a Decentralised Autonomous Organisation(DAO) structure. Its operations are controlled by a non-hierarchical member community. The Lido token(LDO) is a governance token used within the Lido DAO for voting purposes. It allows the community members to decide the future by voting on key issues like the development of the DAO, future initiatives, and proposals to make a change to the DAO.
Read more: What is DAO
Some of the key members of the Lido DAO are Semantic Ventures, KR1 and P2P capital. These are notable names in the crypto space.
As of Jan 10th 2023, the Lido DAO token is trading at $ 2.05. The token has a maximum supply of 1 Billion. It has a total market capitalisation of close to $ 2 billion. Its 24-hour volume is $187,195,217.
LDO token allocation is done amongst various groups. The distribution of tokens is as mentioned below.
How Does 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.
As opposed to conventional staking which requires ETH in the multiples of 32, Lido DAO allows staking of any quantity of ETH the user wishes to stake.
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 allows users to obtain loans by using sETH as collateral.
sETH can be used on Curve DAO as well. Curve DAO enables users to purchase stablecoins.
Pros and Cons of Lido
|Offers a unique flexibility option in Staking
|The 10% fee on the Lido platform is high
|Highly dependent on Ethereum
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.
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.
A 10% fee on the returns obtained by investors is clearly on the higher side.
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.
Is Lido a good investment?
As of 10th Jan 2023, Lido DAO is experiencing a bull run. Over the past month, the coin has appreciated by 80.99%.
LDO token performance at a glance
|Year to date
Looking at a broader perspective, Lido DAO solves a critical problem of illiquidity in the staking ecosystem. From this perspective, it is a valuable token to own. However, each investor must do their research before deciding to buy or sell. This article by itself should not be treated as investment advice of any shape or form.
How to Buy Lido Dao Tokens on ZebPay Singapore?
You can buy Lido DAO tokens (LDO) by logging onto ZebPay and visiting the Quick trade panel.
Step 1: Deposit Fiat currency into your ZebPay wallet
Step 2: Open the Quick trade panel and search for the LDO token
Step 3: Enter the amount of Fiat you would like to invest
Step 4: Check the order details and place the order