The CMP of LDO on 13th Jan’23 is $1.95
What is Lido?
Lido is a decentralized finance (DeFi) protocol built on the Ethereum blockchain, focused on providing liquidity to staked assets on the Ethereum network. It aims to make it easy for users to earn interest on their staked assets by providing liquidity to other users who want to trade those assets. Lido uses a unique liquidity provision mechanism called “Farmed Liquidity” that allows users to stake their assets and earn a return while also providing liquidity to the market. This allows Lido to offer higher returns to liquidity providers compared to other DeFi protocols. Additionally, Lido also offers a yield farming platform, where users can farm LDO tokens by providing liquidity to the pools.
How is it Unique?
Lido is unique in several ways:-
- Farmed Liquidity: Lido uses a unique liquidity provision mechanism called “Farmed Liquidity” that allows users to stake their assets and earn a return while also providing liquidity to the market. This allows Lido to offer higher returns to liquidity providers compared to other DeFi protocols.
- Staked assets: Lido focuses on providing liquidity to staked assets on the Ethereum network. This allows users to earn interest on their staked assets without having to move them out of the staking contract.
- Yield farming: Lido also offers a yield farming platform, where users can farm LDO tokens by providing liquidity to the pools. This allows users to earn additional returns on top of their staked assets.
- Decentralized: Lido is a decentralized finance (DeFi) protocol built on the Ethereum blockchain, which means that it is open-source, transparent, and trustless.
- Low slippage: Lido uses a unique price oracle mechanism that reduces slippage and ensures that users can trade at fair prices.
- LDO token: Lido has its own token LDO which is used for various purposes like governance, liquidity provision rewards, and more.
Tokenomics:
The native token of the Lido Finance is LDO which is an ERC-20 token. The total supply of LDO is 1 billion & it has a circulating supply of 832.6 Million.
The distribution of LDO tokens is determined by the protocol’s liquidity provision mechanism. Users who provide liquidity to Lido pools earn LDO as a reward, in addition to the returns on their staked assets. This means that the more liquidity that is added to the pools, the more LDO tokens are distributed.
The LDO tokens are also distributed through yield farming, where users can farm LDO tokens by providing liquidity to the pools. This allows them to earn additional returns on top of their staked assets.
Competition Analysis:
There are several DeFi protocols and platforms that could be considered competitors to Lido, as they all aim to provide liquidity to staked assets on the Ethereum network. Some examples include:
- Aave: A decentralized lending and borrowing platform that allows users to earn interest on their staked assets.
- Compound: A decentralized lending and borrowing platform that allows users to earn interest on their staked assets.
- Yearn Finance: A decentralized finance platform that allows users to earn interest on their staked assets, as well as participate in yield farming.
- Uniswap: A decentralized exchange that allows users to provide liquidity to trading pairs and earn a return on their staked assets.
- Balancer: A decentralized exchange that allows users to provide liquidity to trading pools and earn a return on their staked assets.
All these protocols and platforms have different approaches to liquidity provision and offer different types of returns to liquidity providers, but they all compete with Lido in the market of providing liquidity to staked assets on the Ethereum network.
Team and Community:
lido finance was founded in october 2020 by constantine lamarchuk, vasily shapovalov and jordan fish.
Constantine holds a doctorate degree in finance and has worked in crypto since 2015 most notably as the founder of p2p validator a company that runs validator nodes on various proof-of-stake blockchains
Vasily shapovalov holds a bachelor’s degree in mathematics and spent nearly a decade working as a software engineer before switching to crypto in 2019. In 2020 vaseline became the chief technology officer of p2p validator and one of his first tasks was to build a third-party staking solution for ethereum’s upcoming beacon chain, this third-party staking solution eventually became lido finance and vasily continues to serve as the project’s technical lead now
while the name jordan fish might not sound all that familiar if you’re into crypto and active on twitter you probably follow him without even knowing that’s because jordan is Cobie formerly crypto cobain a popular crypto influencer podcaster and writer with close on 700 000 twitter followers and
They have 118k followers on twitter which is a good number of followers as a community
Conclusion:
It aims to make it easy for users to earn interest on their staked assets by providing liquidity to other users who want to trade those assets. Lido uses a unique liquidity provision mechanism called “Farmed Liquidity” that allows users to stake their assets and earn a return while also providing liquidity to the market. This allows Lido to offer higher returns to liquidity providers compared to other DeFi protocols. Additionally, Lido also offers a yield farming platform, where users can farm LDO tokens by providing liquidity to the pools.
Pros – Staking liquid proof of stake based tokens without locking them
Cons – The project is being developed continuously and has encountered bugs in past which could have led to a hack, though it was fixed on time without any damage
The protocol is not completely trustless, the withdrawal takes place through multisig wallet
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