Lido Finance Expands onto L2 Solutions with wstETH Farms on KyberSwap
Lido Finance [LDO], the top Ethereum [ETH] stake platform, announced the debut of Ethereum, holding on layer2 scaling alternatives with token bridging to Arbitrum One plus Optimism on KyberSwap in a sequence of posts on Twitter on October 6th, 2022. Each stETH token represents one ether (ETH) token staked on the Ethereum network, indicating that in exchange for rewards, it focuses on network security.
With a market valuation of just under $5 billion, stETH is a very well-liked commodity in the nascent decentralized finance (DeFi) community for Ethereum. It trades at around the same price as ETH. Users can manage transactions in the ecosystem of Ethereum with the use of Arbitrum and Optimism on KyberSwap without being victimized by the customarily huge fees and slow performance of the network. These so-called optimistic rollups gather transactions processed on networks apart from Ethereum’s clogged main chain, return them to Ethereum, and then add those payments to its ledger.
As the Lido Finance staff stated that the staked system was dedicated to making Lido’s staked-asset tokens broadly accessible across Ether Layer 2 as it evolved in July, they provided a clue at this movement.
In order to maintain the special characteristics of stETH, Lido Finance claims that the primary phase of its layer2 roll-out would allow its customers to immediately connect wrapping stETH (wstETH) to Arbitrum One and Optimism on KyberSwap.
In order to facilitate simple incorporation with already-existing decentralized finance protocols, wstETH was chosen as the coin of choice.
Moreover, from October 7th onwards, the Ethereum staking infrastructure plans to distribute 150,000 LDO tokens on KyberSwap as prizes every month for wstETH throughout each network.
Creating wstETH liquidity would take the shape of liquidity-mined rewards on DeFi partnerships like Kyber Network, Curve Finance, and Balancer.
With 4.2 million Ethereum staked via Lido Finance, the stake service has 30% of the market position for Ethereum staking, according to statistics from blockchain research company Glassnode.
Coinbase, the controlled crypto marketplace where 1.93 million Ethereum units have been staked, comes next.
It’s important to remember that the exchange got off to a head start, with ETH stakes dating all the way back to November 2020. The Ether 2.0 Beacon Chain went online a couple of weeks after Lido started a month later, in December 2020, and it quickly established itself as a major player. After the depegging of TerraClassicUSD, Lido’s total value locked (TVL) fell significantly due to the year thus far being defined by a number of market-devastating events, most notably the fall of Terra.
Prior to the demise of USTC, information from DefiLlama shows that Lido’s TVL hit a peak of $18 billion. Lido’s TVL has decreased by 66% since May. So, on September 15th, the eagerly awaited Ethereum merger took place. Surprisingly, despite the hype surrounding the merger, there was no discernible increase in the value of the ETH token.
This has caused the price of Lido to drop by 17% since the merger, according to statistics from CoinMarketCap.