Lido DAO is a community that establishes liquidity pledge services for Ethereum. Lido allows users to obtain pledge rewards without locking assets or maintaining pledge infrastructure.
Lido (LDO) is a secure liquid pledge solution for proof of equity (PoS) cryptocurrency, supporting Ethereum 2.0 (integrated) pledge and other growing ecosystems of Layer 1 PoS blockchain. Users can pledge PoS tokens to Lido and obtain the token version of pledged assets at a ratio of 1:1. They can use the tokenized version of the pledged assets to obtain additional benefits from other DeFi agreements and pledge rewards from the tokens deposited in Lido.

Introduction
Pledge in the PoS blockchain faces a challenge, that is, insufficient liquidity of pledged assets. Once the token is locked, the user cannot access or redeem the token before the end of the locking period, which makes the user lose the opportunity to obtain additional benefits from other DeFi agreements in the market. Complex verifier setting and high access threshold also prevent ordinary retail investors from participating in PoS pledge.
In order to improve the liquidity of pledged tokens and reduce the threshold of pledge, Lido provides an alternative to traditional PoS pledge.
What is Lido?
Lido, founded in 2020, is a liquid pledge solution for ETH and other PoS blockchains, including Solana (SOL), Polygon (MATIC), Polkadot (DOT) and Kusama (KSM).
Lido releases 1:1 token version of pledged assets to users. This provides users with the liquidity of pledged PoS tokens. In summary, they can obtain pledge rewards in Lido and participate in other DeFi activities on the chain to obtain additional benefits.
How does Lido work?
In order to enable more users to participate in the protection (PoS) network, users can pledge any number of PoS assets through Lido and other mobile pledge services to obtain block rewards. Liquid pledge is an innovative alternative, which solves the problems of poor liquidity, complexity and centralization of PoS pledge by not locking the user’s pledge token. It also reduces the access threshold of pledge and the opportunity cost related to locking requirements.
After users deposit PoS assets in Lido, their tokens will be pledged in the PoS blockchain through Lido agreement. This is a pledge pool smart contract, which can manage users’ recharge and withdrawal, entrust funds to node operators, determine pledge reward fees, and cast and destroy tokens. In addition, the smart contract also includes a complete list of node operators, verification keys, and reward distribution records.
Users will receive the token version (stAsset token) of their deposited funds, which can be used to simultaneously obtain rewards in the original deposit agreement, other DeFi agreements, and the decentralized application (dApp), such as collateral for loans and liquidity mining, in order to maximize the reward income.
Take pledge of Ethereum as an example. In the long-awaited “comprehensive” upgrade (previously known as ETH 2.0), Ethereum moved to PoS. Each user can become a verifier by submitting at least 32 ETH, and receive payment to confirm the network transaction. However, for ordinary users, this minimum pledge requirement is not practical.
Through Lido, users can pledge only a fraction of 1 ETH to obtain block rewards. After pledging ETH, users will receive stETH, which is an ERC-20 token representing the ETH deposited at 1:1 ratio. The stETH token is forged when the fund is deposited into the Lido pledge pool smart contract. Once the user selects the ETH token, the stETH is destroyed.
The ETH pledged by the user will be distributed to the node operator (verifier) in Lido network and stored in the ETH beacon chain for verification. The fund is protected in the smart contract, and the verifier cannot access it. After that, Lido DAO will select, load and support the verifier address, and add the address to the registry smart contract. After that, the selected verifier will get a set of verification keys.
The ETH deposited by users will be divided into several groups of 32 ETH among all active Lido node operators, who will use public verification keys to verify transactions involving users’ pledged assets. The user pledge can be divided into multiple verifiers, which can effectively eliminate the single point of failure risk associated with a single verifier pledge. In addition, the node operator will set the address so that the user can withdraw the pledged ETH after the comprehensive completion.
Lido DAO
In order to manage the Lido agreement with a decentralized pipeline, Lido launched a decentralized autonomous organization (DAO) to make key decisions on the operation pipeline of the agreement. This ensures that the agreement is in the best interests of stakeholders and increases transparency and decentralization.
Lido DAO governs a set of liquid pledge agreements. It uses smart contracts to determine and implement rules to promote efficient decentralized decision-making processes. This includes management cost parameters and allocation, as well as adding and deleting node operators in the network.
What is LDO?
LDO is Lido’s original utility token and governance token. This is ERC-20 token, with a total supply of 1 billion.
LDO is used to reward network users. It also grants the holders governance rights within Lido DAO, allowing them to participate in the governance process by voting on certain decisions. The more LDO tokens you hold, the greater your voting power.
Summary
Lido’s liquidity pledge service provides users with comprehensive pledge benefits without sacrificing the liquidity of tokens. It caters to the needs of small and large PoS token holders, making them flexible to pledge and redeem at any time. In addition, by eliminating complex pledge settings and lowering the access threshold of PoS pledge, the liquid pledge in Lido and other agreements will promote the vigorous development of DeFi in the future.
Author:BticoinKOL,Source:https://bitcoinkol.com/archives/2767