In a recent development, Lido Finance, the liquid staking giant, has announced its plans to revamp its tokenomics. Community members have proposed the addition of a staking feature to LDO.
To stake directly to the mainnet, users must possess 32 ETH or approximately $60,000 at current market rates. In response to the high barrier to entry, liquid staking services such as Lido have surfaced, allowing users to deposit any amount of ETH and commence earning.
Jasperthefriendlyghost.eth, a paid oDAO member, shared his views about Lidofinance’s 33% higher staking:
We are close to @LidoFinance crossing 33% of all ETH staked and posing a threat to the security of Ethereum.
— jasperthefriendlyghost.eth | jasper.lens (@Jasper_ETH) May 20, 2023
We just saw the merits of client diversity play out–it's time we do our part to keep the stake decentralized.
With withdrawals – now is the time. pic.twitter.com/nU9q13oUOD
The development of this proposal is expected to be a top priority for many individuals in the space. With an impressive total value locked (TVL) of almost $12 billion, Lido has secured its position as the largest DeFi project.
LDO holders could stake their tokens and receive rewards from the protocol’s revenue. Lido is presently generating revenue by imposing a 10% fee on the rewards received by its users. 50% of the funds are allocated to the project’s DAO, while the remaining 50% are distributed among the node operators responsible for executing the mainnet staking process.
In a recent development, a new proposal has been put forth which outlines that stakers stand to earn a significant portion of the Lido DAOs revenue, ranging from 20% to 50%, provided the proposal is passed. The plan involves executing the strategy through buybacks, whereby the revenue generated would be utilized to purchase additional LDO tokens and subsequently distributed.
Despite concerns, Lido has assured that the likelihood of such an event is low due to the high quality of the Lido validator set and its established track record. Despite the situation, it remains a risk.
