Lido Finance, a liquid staking protocol which currently supports Ethereum 2.0 and Terra blockchains, has expanded to Solana. The news means Lido’s users can now stake Solana’s native SOL token through the protocol and receive stSOL in return.
With centralized staking services such as crypto exchanges, when you stake a token, it gets locked up and cannot be used for other activities unless withdrawn. Lido is called a liquid staking protocol because it provides synthetic tokens such as stSOL, stETH, and stLUNA against staked tokens, which can then be used in decentralized finance (DeFi) applications for further yield-generating opportunities. So while your tokens are staked, you will have equivalent synethetic versions of the same tokens that you can use in the meantime.
DeFi projects that will initially support stSOL include Serum, Raydium, Saber Labs, Phantom, and SolFlare, Kasper Rasmussen, chief marketing officer at Lido, told The Block. He added that these projects will let stSOL holders provide liquidity and earn additional rewards on top of regular staking rewards that they will get through Lido.
Lido is currently very popular for staking ether (ETH). Rasmussen said the protocol has become one of the largest ETH staking addresses, staking more than 1% of all ETH. “We look forward to similar growth on Solana,” he said.
Other popular staking services for ETH include Kraken, Binance, Staked, Stakefish, Bitcoin Suisse, Huobi, and Bitfinex in that order, according to data compiled by The Block Research.
Lido plans to also launch a staking solution for the Polkadot and Polygon blockchains. Rasmussen said developments teams MixBytes and Shard Labs are working for the Lido DAO to bring staking services for DOT and MATIC tokens, respectively. The Solana staking solution was developed in partnership with Chorus One, he said.
Lido is backed by notable backers including Coinbase Ventures and Paradigm and the project has raised at least $75 million in total funding to date in two rounds.
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