What is Lido DAO (LDO)?

Deep Dive

1. Purpose & Value Proposition

Lido solves the liquidity problem in traditional staking by allowing users to stake assets like ETH and receive stETH tokens, which can be traded or used in DeFi while earning staking rewards. This eliminates the lock-up period and capital inefficiency of native staking. The protocol manages over $41 billion in assets (as of August 2025), making it the largest liquid staking provider.

2. Governance & Tokenomics

The LDO token governs protocol decisions, including fee structures, validator onboarding, and treasury allocations. Of the 1 billion total supply, 36% is held in a community treasury for grants and development. A unique Dual Governance system, approved in June 2025, allows stETH holders to veto proposals by locking tokens, introducing checks against centralized control.

3. Key Differentiators

• Decentralized validator network: Unlike centralized exchanges, Lido uses a DAO-vetted set of node operators to minimize single points of failure.
• Regulatory resilience: Recent SEC guidance clarified that liquid staking services like Lido’s aren’t securities if rewards are passed directly to users.
• Cross-chain support: Originally focused on Ethereum, Lido expanded to Polygon but sunset Solana staking in 2025 to prioritize core chains.

Conclusion

Lido DAO is a cornerstone of Ethereum’s staking ecosystem, blending liquidity, governance innovation, and decentralization. Its Dual Governance model sets a new standard for aligning stakeholder interests in DeFi. As Ethereum adoption grows, can Lido maintain its dominance against rising competitors like Ether Fi while balancing decentralization and scalability?