On the 6th of October, LidoFinance announced on Twitter that they will be awarding 150k LDO tokens (equal to $220,000) in prizes every month for wstETH on each network starting October 7. This is in conjunction with the platform’s recent shift to layer 2, a connected network in charge of off-chain transactions.
Lido is allocating 150,000 LDO tokens in rewards per month from Oct 7 for wstETH across each network.
— Lido (@LidoFinance) October 6, 2022
Ethereum is currently the most heavily staked cryptocurrency, but its lack of capability for withdrawals makes it significantly less appealing to users. The ETH network has not yet specified a timeframe for implementing the withdrawal feature. People might have to wait years to get their staked tokens as a result.
Furthermore, only those who are willing to wait days, months, or even years to obtain these staked tokens are interested in this unpredictable, lengthy lockup.
For those who desire to overcome this difficulty, Lido offers a flexible approach to liquid staking.
By staking any volume of Ethereum on Lido, members can receive daily staking incentives while also receiving stETH that can be utilized for borrowing, security, and other purposes. Staker’s claims on the underlying stake pool are also represented by stETH.
However, the value of this token tends to vary. As a result, stETH must be wrapped. Wrapped stETH maintains a steady valuation. The premier stage of Lido’s L2 deployment allows for the connection of the company’s wstETH token to both platforms.
Since Lido issues the same amount of stETH as the amount of ETH staked, the availability of 150k LDO tokens means that users can keep receiving staking rewards on Lido while taking part in other DeFi on-chain transactions for extra yield.
Additionally, using Lido’s L2 protocol to stake ETH exposes users to numerous significant advantages, including cheap gas costs. The provision of the massive liquidity ($220k in LDO tokens), the resulting yield, and the advantages of the new layer will encourage ETH staking.