Lido Finance Cements DeFi Lead, Expands To Optimism: Is LDO Undervalued?

Dalmas Ngetich

7 months ago

2 mins read

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Lido Finance, the largest DeFi platform by assets under management, is expanding. The liquidity staking platform said it now supports the deployment of its stETH value-accruing token on Optimism, a layer-2 solution for Ethereum.

Expansion to Optimism: What It Means

In a blog post, Lido Finance said the decision will allow its users to benefit from daily staking rewards. At the same time, the platform said, those who choose to deploy their stETH on Optimism will have a seamless bridging experience while concurrently unlocking other multichain opportunities.

The deployment means Lido Finance is expanding in line with its multichain strategy. By offering stETH and wstETH on multiple layer-2 platforms on Ethereum, including on Arbitrum, the liquidity staking solution gives users a more flexible way to stake their ETH. Moreover, because Ethereum layer-2 solutions are designed to be scaled, all transactions, Lido Finance said, will be cheap.

Lido Finance is among several liquidity-staking platforms that allow users to stake their ETH and earn a yield. This is possible because Ethereum successfully migrated from a proof-of-work consensus to a staking system in 2022 after the Merge.

Once developers powered off the proof-of-work system, the network was migrated to the Beacon chain. In this new chain, validators secured and processed all transactions.

With validators in the equation, those who sought to operate full nodes and compete for a part of the 3 ETH block reward and fees had to lock in 32 ETH. This threshold was out of reach for most users. Accordingly, the platform allows users to stake ETH without having the 32 ETH required to run a full node.

Lido Finance Manages Over $25 Billion, LDO Down 72% In 9 Months

As of October 16, DeFiLlama data shows that Lido Finance had a total value locked (TVL) of over $25 billion. Over the last year alone, the protocol has generated over $845 million in the last year and more than $1.8 billion since launching.

Although the protocol helps secure the Ethereum mainnet, ETH holders of several layer-2s, including Arbitrum, Base, Linea, and Scroll, can stake directly from these off-chain solutions.

Lido Finance price moving sideways on the daily chart | Source: LDOUSDT on Binance, TradingView

Despite Lido Finance growing its ecosystem, LDO prices are struggling for momentum. Even after gains of October 14, the token is yet to break above September highs and reverse losses of the last nine months. After peaking in March, LDO is down 72%.

Feature image from iStock, chart from TradingView

Dalmas Ngetich

Dalmas, a seasoned crypto reporter, brings a unique perspective to the industry. His specialization in NFTs, blockchain, DeFi, and blockchain news for NewsBTC, combined with a background in mechanical engineering and over a decade of experience in journalism, has allowed him to craft over 10,000 news and feature articles over the past eight years. His diverse range of topics, including technology, Forex, and finance, reflects his comprehensive understanding of the crypto landscape.

His technical expertise and analytical skills have been recognized and featured by leading news outlets such as Investing.com, CoinTelegraph, Entrepreneur, Forbes, and other authority sites. Notably, he broke key news, including the Ripple and MoneyGram partnership, cementing his position as a thought leader in crypto.
The news exploded. Over 100,000 people devoured this meticulously crafted report, from seasoned investors to curious newcomers. His analysis wasn't just dry facts and figures; it crackled with insight, dissecting the implications of the partnership and its potential impact on the future of finance.

His deep understanding of the financial markets, technological advancements, and blockchain developments has made him a respected voice in the industry.

Dalmas is also the founder of BTC-Pulse, a crypto news site, further demonstrating his commitment to the field. He firmly believes that DeFi and NFTs are here to stay and will continue to drive financial inclusion.

Coming from Nairobi, Kenya, it is easy to see the source of his inspiration: Across Africa, millions lack access to traditional banks. Remote villages, limited documentation, and high minimum balances create insurmountable barriers.

DeFi, not just Maker or Aave, for example, but think of Bitcoin and USDT, cuts out the middleman. Forget banks with their limitations.
Even so, DeFi isn't a magic solution. The continent still struggles with reliable internet access, and educational campaigns highlighting the benefits of this wonderful solution are insufficient. Moreover, even for those interested, understanding DeFi can look like learning a new language.

Dalmas is here to help make the tech easy to understand and digestible, even for beginners.
The story of DeFi in Africa is still being written. Challenges abound, but the promise of a more inclusive financial future is a powerful motivator. With innovation and collaboration, Dalmas firmly believes that DeFi could become the key to unlocking Africa's full economic potential.
This possibility and its immense value motivate Dalmas to continue breaking key DeFi innovations and more across the globe. His engineering background further enhances his ability to deliver well-thought-out pieces that blend technical insight with clear, impactful reporting.

Beyond his professional achievements, Dalmas is deeply passionate about technology and politics. Policies drive adoption, and being at the forefront and keeping up with how they evolve is crucial for the sphere to mature.

When Dalmas is not closely monitoring the latest crypto events, he can be found in nature, exploring the picturesque countryside, and traveling with his family and friends. His love for adventure and discovery perfectly complements his investigative and reporting skills.
You can connect with Dalmas on X: @Dalmas_Ngetich, or contact him on Telegram @Dalmas_Ngetich.

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