The host of popular crypto analytics and market commentary show Coin Bureau says that Lido DAO ($LDO), which is “a community that builds liquid staking services and governs the direction of Lido”, could have a disproportionate effect on Ethereum’s governance.
Speaking in a recent YouTube update, Coin Bureau’s host “Guy” told viewers that Lido DAO could eventually become the dominant governance protocol for Ethereum.
Lido, which was introduced on 15 October 2020, is “a liquid staking solution for ETH 2.0 backed by industry-leading staking providers.” It “lets users stake their ETH – without locking assets or maintaining infrastructure – whilst participating in on chain activities, e.g. lending.” Lido “attempts to solve the problems associated with initial ETH 2.0 staking – illiquidity, immovability and accessibility – making staked ETH liquid and allowing for participation with any amount of ETH to improve security of the Ethereum network.”
According to the show’s host, Lido Finance operates a liquid staking protocol, which allows users to stake cryptoassets without having to lock them up, thereby allowing the holders to continue trading them freely.
As reported by The Daily Hodl, Guy said,
The short explanation of how this works is that when you stake your cryptocurrency through Lido Finance, the protocol gives you a tradable token that acts as a sort of receipt for the crypto you staked.
Guy argued that $LDO could evolve into the primary governing protocol for Ethereum due to high demand for liquid staking. He argued that the asset was exhibiting a high growth curve and that it could become the “de facto governance layer of Ethereum” once the latter completes its transition to proof of stake.
Coin Bureau’s host told viewers that the Lido Finance team believes it to be “inevitable” that $LDO will become disproportionately influential of Ethereum and that current estimates show the protocol holding “50% of all staked ETH” in the coming months.
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