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Lido Unveils Roadmap On Ethereum Staking On Layer-2 Arbitrum And Optimism

Manoj Nair




Well known Crypto liquidity staking platform, Lido revealed the road map for its stETH expansion across the Layer-2 DeFi ecosystem. Detailing the technical aspects, the platform revealed that in the initial launch phase Ethereum (ETH) staking derivatives will be connected to Layer-2 solutions Arbitrum and Optimism. On one hand Ethereum scaling is employing Layer-2 ZK-rollups, Lido is following Ethereum by bringing stETH on Layer-2.

Lido Announces Details on Expanding stETH to Layer-2

Highly liquid staking assets have wide use across the DeFi space and Ethereum staking provider Lido Finance aims to create them. Explaining the nitty gritty of the operation Lido in a series of tweets August 16 announced updates on its Layer-2 expansion plan. It also outlined the inception phases of the development as well as the technical guidelines.

The first stage entails bridging ETH staking derivatives to Layer-2 solutions Arbitrum and Optimism, employing wrapped stETH (wstETH). It will enable Lido to build Layer-2 ETH staking in the future.

The bridge contracts for the twin Layer-2 solutions have already been created by the core development team. The bridge has already cleared the audit and smart contracts and successfully deployed.  

The AAVE’s Governance bridging contracts has been employed by the liquid staking platform for L1 and L2 governance. The process enables admin functionality guarded by Lido DAO, rather than multisigs. For better security features such as Emergency Brakes multi-sigs are present available on Ethereum Mainnet, Optimism, and Arbitrum for enhancing security.

This will be followed by a snapshot vote for DAO approval of bridge plans post a successful audit of the governance bridging contracts for Arbitrum and Optimism.

The expansion plan to Layer-2 will enable lower fees for Ethereum stakers who will also benefit earning more yields through new DeFi applications on Layer-2.

Lido Rising Supremacy In Ethereum Staking

The leading staking platform has over 31% market share for Ethereum staking with over 4.28 million ETH is staked on Lido, worth $8.04 billion. However, there are many questions about the supremacy of Lido in Ethereum Staking due to the centralization risk.

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