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ido Finance, one of the largest Merge staking providers, has introduced two layer-2 networks, Arbitrum and Optimism, which it claims improve access to Ethereum staking while lowering gas fees.

The plan to expand to L2 networks was first announced in July, when the team recognized that several layer-2 networks had demonstrated economic activity, with the new deployment to L2 networks Arbitrum and Optimism going live on Oct. 7.

The platform offers liquid staking, which gives stakers greater flexibility because they can withdraw their funds at any time, as compared to staking effectively and having it locked up.

Coinbase CFO Alesia Haas has previously stated that institutional staking will not take off until the issue of asset lockup is resolved. Because it offers this versatile or liquid staking option, it has become increasingly popular.

The first step of its layer-2 rollout allows Lido's wrapped stETH (wstETH) token to be bridged between the two networks.

stETH is the Ethereum liquid staking token that the platform issues in ratio to staked ETH. Its wrapped version maintains a fixed stETH balance for use in DeFi applications that necessitate a constant stability mechanism.

Furthermore, beginning on launch day, Lido will award 150,000 LDO tokens for wstETH bridged across each network. The initiative seeks to increase wstETH liquidity for farming rewards on DeFi partners such as Balancer, Curve, and Kyber Network.

According to its website, it has $7.4 billion in ETH staked, representing approximately 5.5 million tokens, or about 40% of the total staked. It was also reported that stETH lost its peg to ETH earlier this year when the crypto virus spread but recovered quickly.

The layer-2 networks it has selected to implement first have a combined market share of 80%. According to L2beat, Arbitrum has a 51% share in the market and $2.42 billion in total value locked, while Optimism has a 30% share and a $1.45 billion TVL.

What are your thoughts on Lido's recent launch of layer-2 Ethereum staking and LDO rewards? Drop your comment by sharing this article on social media.

Posted 
Oct 7, 2022
 in 
Crypto News
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