LIDO is a decentralized staking platform that facilitates entry into staking through its easy-to-use interface. It allows you to stake even a fraction of an ETH token and earn a passive income. This article provides an overview of staking, how Lido makes it easy to participate in staking and well as deep dive of Lido’s ecosystem.
Staking and mining are two different phenomena related to cryptocurrency that are used for creating new coins and circulating them on the market. In mining, a miner solves computational equations to mine new coins and get rewarded. As part of staking, a staker deposits money into a cryptocurrency wallet to support the security and operation of a blockchain network. In its simplest form, staking is the process of locking cryptocurrencies to receive rewards for holding them
What is Lido and what problems does Lido solve?
Ethereum’s transition to proof of stake (PoS) began on December 1st, 2020, with the launch of the Beacon Chain. As a result, holders of Ethereum tokens were able to earn rewards by staking their tokens to protect the Ethereum network. However, staking is not something a typical ETH cryptocurreny holder can do because it requires extensive technical knowledge to make it work. Here are some issues associated with staking ETH tokens.
1. Technical expertise: It is important for a person to have the ability to install and update software all the time so as to stay current with the latest release of the stake module. The failure to run the software due to power outages or other issues results in a loss of rewards and in the worst case, staked Ethereum.
2. No unstaking: Due to the fact that Ethereum 2.0 has not yet been launched and no deadline has been set, once ETH tokens have been staked they cannot be withdrawn until Ethereum 2.0 is launched. Because there is no deadline for Ethereum 2.0 network launch, no one knows when they will be able to withdraw their funds. Probably by the end of 2023, maybe even earlier. All depends on how quickly Ethereum core developers complete the transition from Proof of Work to Proof of Stake.
3. ETH Token requirements: In order to serve as a validator and stake tokens, one must have ETH tokens worth 32 ETH. At today’s ETH price it is more than 100,000 USD investment one must make to start earning staking rewards.
Lido tackles all these problems head on and solves them elegantly. With LIDO, anyone can stake ETH tokens even if they only have a fraction of them. Lido’s liquid staking solution for Ethereum is backed by the biggest providers.
LDO – Lido’s governance token
As Lido Finance DAO’s governance token, LDO facilitates the platform’s goal of building a completely trustless liquid staking service. It is responsible for decentralizing ownership and decision making in Lido, with Lido DAO governance decisions based on LDO.
Holders of LDOs are eligible to vote on any decision that affects the future of the platform. Thus, everyone has a voice and decentralization is maintained. One billion tokens were minted for LDO’s launch in December 2020. They were distributed as follows:
- DAO Treasury: 36.32%
- Investors: 22.18%
- Initial developers: 20%
- Founders and future employees: 15%
- Validators and withdrawal key signers: 6.5%
Who are the top 25 LDO Token Holders?
We scanned through the data warehouse of Flipside Crypto to identify the top 25 holders of LDO tokens on Ethereum blockchain. As of May 29th 2022, the following are the top 25 holders of LDO tokens. The LIDO Finance treasury holds 171 million LDO tokens and it is followed by an unnamed wallet holding 70 million LDO tokens. Also we found 5 other wallets competing for 3rd group with holdings between 40 million and 70 million tokens.
This chart shows the top 25 LDO token holders information as a bar chart along with the percentage of tokens they hold from 1 billion tokens minted during genesis. The LIDO Tresasury holds 17% of tokens, followed by 6 whale wallets holding 4.5% to 7% of LDO tokens with them. The smallest wallet in the top 25 LDO holders lists holds 0.7% of total supply of LDO tokens.
How did these top 25 LDO Token Holders Got them?
So what is the source of LDO tokens for these top 25 holders? The following sankey chart shows the top 25 LDO holders on the right side and the source from which they got the LDO tokens on the left. As you see most of them got their tokens from LDO’s Aragon Token Manager used for airdropping them. Apart from Lido Token Manager, few of these whales got tokens from DEXs like Uniswap, Curve Finance and 1Inch.