Lido Staked Ether (STETH)

Staking and Rewards

Lido Staked Ether lets users stake their ETH and earn staking rewards without locking up their tokens. When you stake ETH, you get stETH tokens that represent your staked ETH plus rewards.

Liquidity and Flexibility

Unlike traditional staking, Lido Staked Ether provides liquidity by allowing users to trade, transfer, or use stETH tokens freely. This means you can keep earning rewards while still using your staked assets.

DeFi Applications

stETH can be used in many decentralized finance (DeFi) platforms for lending, borrowing, providing liquidity in pools, yield farming, and as collateral. This helps users maximize the value of their staked ETH.

Simplified Staking Process

Lido makes staking easy by handling the technical parts and node operations, so users can stake ETH with just a few clicks and start earning rewards immediately.

For more details, visit the official Lido website: https://stake.lido.fi/

Pros

• Liquidity: Lido Staked Ether tokens (stETH) can be traded or used in DeFi apps, unlike traditional ETH staking which locks funds.
• Accessibility: You can stake any amount of ETH, no need for the full 32 ETH required to run a validator node.
• Ease of Use: No need to manage or run a validator node yourself; Lido handles the technical side.
• Daily Rewards: Earn staking rewards regularly while keeping your tokens liquid.
• DeFi Integration: stETH is widely accepted across many decentralized finance platforms.
• Governance: Lido is governed by a DAO, allowing community input on decisions.

Cons

• Centralization: Lido controls a large share of staked ETH, which could affect network decentralization.
• Smart Contract Risks: As with any protocol, there is a chance of bugs or vulnerabilities in Lido’s smart contracts.
• Fee Structure: Lido charges fees on staking rewards, which can reduce overall earnings.
• Market Value Fluctuations: The price of stETH may not always match ETH 1:1, especially during high demand or market stress.
• Complexity: Using stETH in DeFi can be complicated for beginners.

For more details, visit Lido's official site.

Founders of Lido Staked Ether

Lido Staked Ether was founded by three main people:

• Konstantin Lomashuk: Founder of P2P Validator and co-founder of Lido.
• Vasiliy Shapovalov: CTO and co-founder of Lido.
• Jordan Fish: Co-founder who left the project team in 2021.

These founders created Lido to make Ethereum staking easier and more accessible by solving issues like high minimum staking amounts and illiquidity.

Venture Capital Firms

Lido Staked Ether has attracted investments from well-known venture capital firms such as Andreessen Horowitz (a16z) and Paradigm. These firms support the project by providing funding and strategic guidance.

Crypto Exchanges and Platforms

Coinbase Ventures, the investment arm of Coinbase, is also an investor in Lido. This connection helps Lido integrate with major crypto platforms and reach a wider audience.

Decentralized Autonomous Organization (DAO)

Lido is governed by a DAO, which means its investors and token holders collectively make decisions about the platform’s future. This decentralized governance includes many individual and institutional stakeholders.

Individual and Institutional Investors

Beyond big firms, many individual crypto holders and institutional investors stake their Ether through Lido, contributing to its large pool of staked assets, which has exceeded $30 billion in value.

For more details, visit the official Lido website.

Halal Status

Yes, Lido Staked Ether is generally considered halal by many in the Islamic finance community because it involves staking Ethereum to help secure the network and earn rewards, which is seen as similar to earning rental income rather than interest (riba).

Reasoning

Staking with Lido means you lock your ETH to support the Ethereum network’s Proof-of-Stake system. The rewards come from network participation, not from lending or interest-based activities. This aligns more closely with halal principles as it is viewed as earning from a service or asset use rather than from interest.

Community Views

Some Islamic scholars and community members consider it halal, while others see it as a grey area due to complexities in crypto. However, the dominant view is that staking ETH through Lido is permissible because it does not involve prohibited interest or gambling elements.