Lido Expanded To Layer 2 Networks Optimism And Arbitrum
Lido Finance, one of the largest Merge staking providers, has debuted on two layer-2 networks, Arbitrum and Optimism, which it claims enhances access to Ethereum staking while lowering gas prices.
Lido offers liquid staking, which gives stakers greater freedom because they may withdraw their cash at any moment, as opposed to staking Ethereum directly and having it locked up.
The initial wave of its layer-2 implementation allows Lido’s Wrapped Staked Ether (wstETH) token to be bridged across the two networks.
Each stETH token symbolizes one ether (ETH) token staked with Ethereum’s network, which means it contributes to network security in return for incentives. stETH, which has a market capitalization of over $5 billion, trades around the price of ETH and has become a highly popular commodity in Ethereum’s burgeoning decentralized finance (DeFi) industry.
Furthermore, beginning on launch day, Lido will provide 150,000 Lido DAO (LDO) tokens in prizes for wstETH bridged across each network. The effort seeks to increase wstETH liquidity for farming incentives on DeFi partners like Balancer, Curve, and Kyber Network. Arbitrum and Optimism are Ethereum layer 2 networks that use the popular staked ether (stETH) coin.
Arbitrum and Optimism enable users to transact in the Ethereum ecosystem while avoiding the network’s previously high fees and poor performance. These optimistic roll-ups take transactions on networks other than Ethereum’s congested main chain, bundle them up, and send them back to Ethereum to be included in its ledger.
The layer-2 networks it has decided to deploy first have a combined market share of 80%. According to DefiLlama, about $3 billion in Bitcoin was flowing on the Arbirtrum and Optimism networks at the time of publication. According to L2beat, Arbitrum has a 51% market share and $2.41 billion in total value locked (TVL), while Optimism has a 30% share and $1.45 billion in TVL.
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