Welcome to Module 10- Course 3 of Mission Web3!
In this module, we’ll dive into the finer details of how to get started with liquid staking on Lido.
What is Lido?
As of 16 February 2024, Lido ranks as the largest liquid staking pool with over $27.9b TVL. This 2020-launched platform is a liquid staking service provider for PoS cryptocurrencies designed to unlock liquidity for users’ staked tokens. Not just that, Lido is also the go-to for users to stake as little or as much crypto as they want, regardless of the minimum threshold required by the blockchain.
Due to their size, Lido also features one of the most battle-tested smart contracts, which makes them an attractive option to those who value stability and safety of funds.
How does Lido work?
When you stake with Lido your tokens are batched and staked on the Ethereum blockchain with professional, independent node operators.
This ecosystem is underpinned by smart contracts, which have the following responsibilities:
Managing your deposits and withdrawals
Determining staking reward fees
Minting and burning LSTs
Delegating the protocol’s pooled assets to node operators
Maintaining the validation keys and keeping records of the reward distribution
To illustrate, during the staking process, stETH (staked ETH) will be minted as your funds are deposited into Lido’s staking pool smart contract. Likewise, these same stETH tokens will be burned as you withdraw your ETH tokens. And don’t worry, stETH is an ERC-20 compatible token, so you can still use the tokens to participate in other protocols as if you hadn’t staked your ETH.
On this topic, Lido is also a great solution for users who don’t have a substantial amount of assets yet want to participate as a validator. For instance, to become a staking validator on the Ethereum network, you must deposit a minimum of 32 ETH. Lido, however, is democratizing the network’s staking requirements by allowing users to stake fractions of ETH to earn block rewards.
Ready to get started with Lido?
If you’re an experienced staker, this guide will feel familiar. But if not, fret not; this is a simple process, and we’ll guide you through it.
Connect your funded web3 wallet. Lido currently supports the Ethereum and Polygon networks. In terms of wallets, you can use MetaMask, WalletConnect, Coinbase Wallet, Ledger, Trust Wallet, MEW Wallet, Atomic Wallet, XDEFI, Bitget Wallet, or Ambire.
Once you’ve successfully connected your wallet, you’ll be prompted to include the amount you want to stake. As soon as you hit submit and confirm the transaction, your assets will be staked, and you will receive stETH as a releasable asset to reflect your staked balance. Your stETH will accrue daily staking rewards and grow in balance.
And just like that, you are now staking your ETH via Lido and earning rewards on your assets! You can track your staking rewards within the Lido platform, including transaction history, your staked holdings, and the rewards you have received to date. When you want to withdraw your assets, unstake them from the protocol and send the assets back into your wallet.
Now that you know the nitty gritty, let’s get earning! Hop on over to lido.fi to get started.
Claim your Galxe NFT here, to complete the tenth module of MissionWeb3!