With the completion of the Ethereum Shanghai upgrade, the Lido token of the ETH pledge agreement has soared nearly 120% in the past month. However, some people have also raised concerns about Lido centralization. Is it safe to pledge Ether on Lido? According to existing information, Lido staking is a safe liquidity staking. Although the launch of the liquidity staking protocol has allowed Lido to grow rapidly, which has brought about centralization issues, it is generally safe and cannot be completely denied. It, and Lido is essentially middleware or a set of software on Ethereum. Next, the editor will talk about this issue in detail for you.
Lido is a secure liquidity staking solution whose code is open source and continuously reviewed to ensure security. The validators in the validator set have been strictly selected and are all of high quality, which can minimize the risk of staking. Additionally, Lido uses non-custodial staking services to eliminate counterparty risk. Lido also uses DAO for governance decisions and risk management.
When pledging assets, you generally only need to select one verification node. But by staking with Lido, your assets will be dispersed to multiple validators, effectively reducing the risk of staking.
Lido is a project in the field of cryptocurrency that aims to provide users with Ethereum 2.0 staking services. It allows users to stake their ETH, participate in network validation for ETH2.0, and earn rewards through the process. The time it takes to get back your staked funds may vary based on a variety of factors, including network congestion, Lido’s terms of service, and Ethereum 2.0’s protocol rules. Users can decide whether to participate in staking based on their needs and risk tolerance. Staking ETH provides users with the opportunity to participate in the consensus of the Ethereum network and the opportunity to receive corresponding rewards during the network verification process.
The current profit model of Lido mainly relies on extracting 10% from the pledge income as protocol income. Among them, 5% is owned by the staking node operator, and the other 5% goes into the Lido treasury, which is governed by LDO. Since staking income is less affected by market fluctuations, currency-based income is almost unaffected by the market. In comparison, Lido’s protocol revenue in December was slightly lower than GMX, while total protocol fees exceeded Uniswap.
Affected by the expected upgrade in Shanghai and Lido’s leading position in the industry, it is expected that Lido will absorb more pledged assets in the future, thereby increasing its protocol income. Lido’s continued rise this year also reflects market sentiment towards the platform.
With the upcoming Shanghai upgrade of Ethereum, the DeFi platform for ETH staking services must quickly upgrade to adapt to the new changes. As the largest ETH staking service provider, Lido announced the launch of the LidoV2 upgrade on February 8. This is the largest upgrade to date and a major change on the road to further decentralization. LidoV2 upgrade mainly involves two aspects, namely stakingRouter (staking router) and withdrawal. This upgrade aims to improve overall performance and security, as well as provide users with a better staking experience. By introducing the new stakingRouter, Lido is able to better manage and allocate users’ staking funds, thereby improving the efficiency and reliability of the system. In addition, Lido will also improve its withdrawal functionality, giving users more flexibility to withdraw their staked assets. These upgrades will bring greater development potential to Ethereum’s staking ecosystem and promote the further development of decentralized finance.
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