The Lido DAO (LDO) is an attempt to cash in on one of Ethereum’s biggest drawbacks, a lack of liquidity.
They claim Lido allows users to stake Ethereum (ETH), ERC20 cryptocurrencies, and ERC-721 data nonfungible tokens (NFTs) without locking assets or infrastructure. ERC20 are fungible tokens or cryptocurrencies built in the Ethereum blockchain. The ERC-721 are NFTs built in the Ethereum blockchain.
They do not say if Lido can stake BEP-20 tokens. BEP-20 is a token standard that extends ERC-20 tokens to the Binance Smart Chain blockchain. Theoretically, you could stake BEP-20 tokens with either Ethereum (ETH) or Binance (BNB) with something like the Lido DAO.
Additionally, the claim Lido stakers can participate in other blockchain activities, such as trading and lending. The Lido decentralized autonomous organization (DAO) rewards stakers with Ethereum (ETH) tokens on a one-on-one basis.
How Lido makes one-on-one Ethereum payments possible
The Lido DAO rewards users in the stETH tokens. A stETH token combines the value of initial deposits, staking rewards, and penalties. Lido can mint and burn stETH tokens. The stETH resembles a stable coin. Each stETH contains a smart contract that makes a one-to-one Ethereum (ETH) payment when you spend it.
Additionally, the Lido DAO updates stakers daily. They claim Lido users can earn regular ETH yields and lending rewards. In particular, Lido requires stakers to have no lockups and minimum deposits.
In contrast, the Lido Dao (LDO) token is an Ethereum token that grants governance rights in the Lido Decentralized Autonomous Organization (DAO). Lido (LDO) holders receive voting rights in the Lido DAO. The more LDO a person holds, the more votes she or he gets.
Lido uses a protocol smart contract and Ethereum proof-of-stake deposit contracts to contain funds. The Ethereum staked in Lido will be available in transfers on the Ethereum 2.0 blockchain.
What Value does the Lido DAO offer?
They claim the Lido DAO had 111,708 stakers and total staking assets of $8.240 billion on 12 May 2022. They also claim the Lido DAO had paid out $386.248 million in total rewards on 12 May 2022.
They claimed Lido was staking $8.945 billion worth of Ethereum (ETH) and paying an APR of 3.6% on 10 May 2022. Similarly, they claim Lido was staking $663,564 worth of Terra (LUNA) with an 8.3% APY on 12 May 2022.
Moreover, they claim the Lido DAO was staking $133.776 million worth of Solana (SOL) with an APR of 4.7% on 12 May 2022. Plus, the Lido DAO was staking $1.592 million worth of Kusama (KSM) with an APR of 22.1% and $9.447 million worth Polygon (MATIC) with an APR of 8.7% on 12 May 2022.
How Does LIDO Work?
The Lido DAO (LIDO) lets users stake their assets for daily staking rewards. Lido users can stake any amount of tokens.
When staking, Lido users mint staked tokens such as the stETH that pegged one-on-one to cryptocurrencies or other assets. Lido users can use Lido assets as collateral for lending, yield farming and other decentralized finance (DeFi) activities.
Lido DAO is a community that builds liquid staking services. The Lido ecosystem comprises many apps including Stake Ether, the Curve exchange liquidity pool, MakerDao, AAVE, Ledger, the Anchor Protocol which stakes Ethereum on Terra, SushiSwap onsen lets users stake tokens for daily liquidity rewards, 1inch is a DEX aggregator that sources the best prices across the market. The Lido DAO supports 29 other ecosystem system apps.
What value does the Lido token offer?
Lido is an interesting DAO with many users that is generating money through staking. Mr. Market has some interest in the Lido DAO, for instance, LDO was the CoinMarketCap’s 15th most trending cryptocurrency on 10 May 2022.
In contrast, CoinMarketCap named Lido DAO (LDO) the 94th largest cryptocurrency, with a Coin Price of $1.35 on 12 May 2022. CoinMarketCap gave Lido a Market Capitalization of $422.671 million, a Fully Diluted Market Cap of $1.345 billion, a Total Locked Value of $9.166 billion, and a 24-Hour Market Volume of $23.275 million on 12 May 2022. They based those numbers on a Circulating Supply of 312.951 million LDO, a Maximum Supply of one billion LDO, and a Total Supply of one billion LDO.
Comparatively, CoinBase gave the Lido DAO (LDO) a $422.1 million Market Cap, a $23.3 million 24-Hour Market Volume, and a Coin Price of $1.35 on 12 May 2022. They based those numbers on a Circulating Supply of 313 million LDO. CoinBase gave LDO an all-time high Coin Price of $18.62.
I consider the Lido DAO an interesting DAO speculators need to examine. I think speculators need to examine Lido because it appears to be making money from liquidity.
Originally published at https://marketmadhouse.com on May 12, 2022.
