Lido DAO (LDO) is a decentralized autonomous organization that provides liquid staking solutions for Ethereum 2.0 and other proof-of-stake (PoS) blockchains. Established in December 2020, Lido aims to address the liquidity and accessibility challenges associated with traditional staking mechanisms by allowing users to earn staking rewards without locking assets or maintaining staking infrastructure.
The native governance token of Lido DAO is LDO, which is utilized within the ecosystem for governance decisions, protocol incentives, and managing the parameters of the Lido protocol. LDO can be used to incentivize various activities within the ecosystem, such as liquidity provision on decentralized exchanges, enhancing the overall liquidity and stability of stETH and other Lido-issued staked assets.
Lido DAO enables users to stake their Ethereum (ETH) and receive stETH (staked ETH) in return, representing their staked ETH plus accruing rewards. This mechanism ensures that users' staked assets remain liquid and accessible, enabling participation in the DeFi ecosystem without sacrificing the potential yield from staking. Lido extends this service to other PoS blockchains, offering a unified and accessible staking solution across multiple networks.
The Lido protocol operates on the Ethereum blockchain and integrates with Ethereum 2.0's Beacon Chain, leveraging smart contract technology to automate the staking process and distribution of rewards. By pooling users' staked assets, Lido allows for more efficient capital allocation and reduces the entry barriers for individual validators, promoting greater network security and decentralization.
The development and governance of Lido are guided by the Lido DAO, a collective of LDO token holders, including individual community members, blockchain development teams, and other stakeholders. This decentralized governance model ensures that decisions reflect the consensus of the community, aligning with the principles of transparency, inclusivity, and decentralization that underpin the blockchain ecosystem.
