Polkadot’s Moonbeam adds liquid staking giant Lido
Polkadot’s DOT token will be supported with flexible staking through two projects Lido and Moonbeam.
Moonbeam (GLMR), a project compatible with the Ethereum Virtual Machine (EVM) and the name that won the 2nd parachain slot on Polkadot, announced that it is collaborating with Lido staking solution to support flexible staking for DOT coin. Staking auditor MixBytes is also helping with this effort.
In February, the same trio of projects also brought flexible staking of KSM tokens to Kusama, Polkadot’s “twin” blockchain.
As a Proof-of-Stake network, Polkadot requires users and validators to stake DOT tokens (DOT lock) to be able to participate in transaction verification and network protection, in return for rewards. DOT tokens. However, the amount of DOT that needs to be locked is quite large and can cause significant opportunity costs.
The launch of Lido on Polkadot allows DOT holders to stake their assets while maintaining access to the liquidity of that staked position and contributing to the security and stability of Polkadot.
When staking DOT with Lido, users will receive a staked DOT (stDOT) token in return. stDOT is a rebasable token similar to stETH with rewards reflected through a daily balance increase. stDOT represents staked tokens, accruing rewards without bonding delay, and can be sold without waiting an unbonding period, while having the reduced risk of slashing events.
Lido’s popularity is clearly demonstrated by the fact that although this project has just been launched in December 2020, it has reached a locked value of up to $8.4 billion. At the beginning of May, Lido’s TVL at one point hit $19.1 billion, making it the DeFi protocol with the highest TVL in the cryptocurrency industry. However, after the collapse of LUNA-UST and the market’s sell-off, Lido’s USD-based TVL has clearly collapsed.
Lido will allow Polkadot DOT holders to stake xcDOT (cross-chain DOT), a token of Moonbeam’s XC-20 standard, for EVM compatibility. Stakingers will receive back stDOT, a token that certifies the locking of DOT with Lido.
Moonbeam CEO Derek Yoo commented:
“Liquid staking is really a basic building block of the ecosystem. We’re positioning Moonbeam as the best place to make multichain apps, as we believe there’s a shift from people deploying apps with a single chain to deploying them to multiple chains, which is part of why we chose to build on Polkadot.”
As well as the smart contract-based application that lives on Moonbeam, there’s also a component that lives on the Polkadot relay chain, the ecosystem’s rule-enforcing centerpoint that handles blockchain security and staking services, in particular, explained Yoo.
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