Lido Finance, one of the largest Merge staking providers, has debuted on two layer-2 networks, Arbitrum and Optimism, which it claims enhances access to Ethereum staking while lowering gas fees, as reported by Cointelegaph.
As per Cointelergaph, the idea to expand to L2 networks was first announced in July, when the team acknowledged that some layer-2 networks had “demonstrated economic activity,” with the latest deployment to L2 networks Arbitrum and Optimism going live on October 7. Lido offers liquid staking, which gives stakers greater flexibility because they can withdraw their cash at any moment, as opposed to staking Ethereum directly and having it locked up.
Coinbase CFO Alesia Haas has previously stated that institutional staking will not take off unless the issue of asset lockup is resolved. Because Lido offers this flexible or liquid staking option, it has increased in favour. The first wave of its layer-2 rollout allows Lido’s wrapped stETH (wstETH) token to be bridged between the two networks.
stETH is the Ethereum liquid staking token that Lido issues in proportion to staked ETH, and its wrapped version maintains a fixed stETH balance for use in DeFi applications that require a constant balance mechanism.
The layer-2 networks it has decided to deploy first have a combined market share of 80%. According to L2beat, Arbitrum has a 51% market share and $2.42 billion in total value locked, while Optimism has a 30% share and a $1.45 billion TVL, as reported by Cointelergaph.
(With insights from Cointelegraph)
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