One of the leading Ethereum staking providers, Lido Finance, has established two layer-two networks, Arbitrum, and Optimism. Lido noted that this initiative would improve Ethereum staking and lower gas charges.
Lido’s stETH Expands To Arbitrum And Optimism
Meanwhile, Lido first announced its intention to extend to l2 in July. The team believed the network was very profitable and would help boost its operations.
Lido stated on its official Twitter account on October 6th that it is now on Layer-2 networks, Optimism, and Arbitrum.
“With a single click, link your staked Ethereum to Layer-2 protocols to take advantage of lower gas pricing and exciting DeFi prospects,” the tweet stated.
Lido provides liquid staking services, giving stakers more flexibility. Users have the option to remove their assets at any time. This is distinct from directly staking ETH when it is locked up for a set time.
Meanwhile, Lido announced Thursday that its platform will now support wrapped stETH to ETH layer-two networks, Optimism and Arbitrum.
Additionally, each stETH token stands for every ETH staked on the Ethereum blockchain. This means the token Secures transactions on the network in exchange for incentives.
The market cap of stETH is over $5 billion, and it trades at the same price as Ethereum. The token has gained huge popularity in Ethereum’s DeFi ecosystem.
Benefits Of Optimism and Arbitrum
Optimism and Arbitrum enable users to trade on the Ethereum ecosystem. Both networks offer low fees and high speed to users. They do not process transactions on Ethereum’s main chain, which is congested.
After processing transactions, these l2 networks group them and send them to the Ethereum blockchain. As per data from DefiLlama, crypto worth more than $3 billion is circulating on Optimism and Arbitrum’s network.
Furthermore, Lido promised to distribute a reward of over 150,000 LDO tokens to users each month. It will start issuing the reward tokens today, October 7th
Meanwhile, only stakers who bridge their wstETH across both networks will receive the reward. Lido wants to boost the liquidity of its wrapped stETH on DeFi platforms like Balancer, Kyber Network, and Curve.
Last month, Nansen, a blockchain analytics network, issued a report. The report revealed five major entities holding over 64% of the total staked Ethereum.
Nansen’s report stated that just 11% of the total Ethereum in circulation is staked. 65% of the remaining Ethereum in circulation is liquid, while 35% is illiquid.
However, the report stated that three major crypto exchange firms hold over 30% of staked Ethereum. They include Binance, Kraken, and Coinbase.
According to Nansen’s report, Lido Finance accounted for the biggest volume of staked Ethereum. The platform had a market share of 31% share.