DeFi Leader Lido Finance Introduces stETH on Optimism Network

TLDR

Lido Finance expands to Optimism, allowing stETH deployment on the layer-2 solution
Users can benefit from daily staking rewards and multichain opportunities
Lido Finance is pursuing a multichain strategy, offering stETH on multiple layer-2 platforms
The platform manages over $25 billion in total value locked (TVL)
Despite ecosystem growth, LDO token is down 72% from its March peak

Lido Finance, the leading decentralized finance (DeFi) platform by assets under management, has announced its expansion to Optimism, an Ethereum layer-2 scaling solution.

This move allows users to deploy Lido’s stETH token on Optimism, opening up new opportunities for staking and yield generation.

The expansion to Optimism is part of Lido Finance’s broader multichain strategy. By offering stETH and wstETH on various layer-2 platforms, including Arbitrum, Base, Linea, and Scroll, Lido aims to provide users with more flexible options for staking their Ethereum (ETH).

Lido Finance’s blog post highlights that users who choose to deploy their stETH on Optimism will enjoy daily staking rewards. Additionally, they will benefit from a seamless bridging experience and access to new multichain opportunities.

This expansion is expected to enhance user experience by offering cheaper transactions, as Ethereum layer-2 solutions are designed for scalability and cost-efficiency.

The platform’s growth comes in the wake of Ethereum’s transition from a proof-of-work to a proof-of-stake consensus mechanism in 2022, known as “The Merge.” This shift introduced a staking system where validators secure and process transactions on the network.

To operate a full node and compete for block rewards, users need to lock in 32 ETH, a threshold that is out of reach for many individual investors.

Lido Finance addresses this barrier by allowing users to stake smaller amounts of ETH without the need for running a full node. This service has proven popular, contributing to Lido’s significant market position in the DeFi space.

As of October 16, 2023, data from DeFiLlama shows that Lido Finance manages over $25 billion in total value locked (TVL). The protocol has generated impressive revenue, with over $845 million earned in the past year and more than $1.8 billion since its launch.

Lido Finance not only supports Ethereum staking but also enables ETH holders on several layer-2 networks to stake directly from these off-chain solutions.

This approach aligns with the growing trend of layer-2 adoption in the Ethereum ecosystem, which aims to improve scalability and reduce transaction costs.

Despite Lido Finance’s expanding ecosystem and strong market position, its native token, LDO, has faced challenges in the cryptocurrency market.

After reaching a peak in March 2023, LDO has experienced a significant downturn, with its value declining by 72% over the past nine months. This price action contrasts with the platform’s growth in terms of assets under management and network expansion.

The recent gains observed on October 14 have not been sufficient to break above September highs or reverse the losses accumulated since March.

This price performance highlights the complex relationship between platform adoption and token value in the DeFi sector.

The post DeFi Leader Lido Finance Introduces stETH on Optimism Network appeared first on Blockonomi.