Lido is a protocol known for offering liquid staking. When you stake through it, you receive a token that represents your staked position, which can be used elsewhere in DeFi while the underlying stake continues to earn staking rewards.
The appeal is that funds do not have to sit locked and idle. The representative token can be moved or used in other applications, which is why liquid staking has become widely used, particularly on networks where staking otherwise locks funds for a period.
This entry explains what Lido is and the concept it applies. It is educational. Liquid staking adds risks, including reliance on the protocol working correctly and the representative token price drifting from the underlying value, and nothing here recommends using it or holding any token.
Frequently Asked Questions
What does Lido offer?
Lido offers liquid staking, giving you a token that represents your staked crypto. That token can be used elsewhere while the underlying stake keeps earning staking rewards.
What risks come with liquid staking through a protocol?
Risks include reliance on the protocol working correctly and the chance that the representative token price drifts from the value of the underlying staked assets.
