Crypto staking service provider Lido Finance is planning to bring staked Ether (stETH) to Ethereum’s layer-2 decentralized finance (DeFi) space, the company said in a blog post on 18 July.
According to the announcement, Lido’s expansion into layer-2 will begin with support for bridging and staking of wrapped stETH (wstETH) on layer-2 networks, though the company plans to eventually allow users to stake their ETH directly on layer-2 “without the need to bridge their assets back” to Ethereum. Lido’s team said in the blog post that:
“Ethereum is scaling, and Lido is following suit. We’re beyond pleased to unveil our expansion plans for Lido on L2, starting with the expansion of stETH across the growing L2 DeFi ecosystem. For Ethereum stakers, this means staking with lower fees and access to a new suite of DeFi applications to amplify yields.”
Prior to the announcement, Lido had already partnered with privacy-focused layer-2 network Aztec and layer-2 wallet provider Argent, integrating its bridged staking services with both projects. The company also noted that more partnerships and integrations will be revealed in the coming weeks, and that plans to expand to all layer-2 networks that have “demonstrated economic activity”, starting with Arbitrum and Optimism.
Lido is a DeFi protocol for liquidity staking of proof-of-stake (PoS) assets. The project claims to have more than 4.2 million ETH (worth around $6.5 billion) staked on its platform, which accounts for around one third of all ETH staked on the Ethereum 2.0 network. While it is primarily used for ETH staking, Lido also provides rewards for a number of other assets, such as Solana (SOL), Kusama (KSM), Polkadot (DOT), and more.