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Lido V2 Live: Here's What You Need to Know

Thu, 05/18/2023 - 08:25
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Arman Shirinyan
Lido introduces new liquid staking technology that might bring even more decentralization to Ethereum network
Lido V2 Live: Here's What You Need to Know
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In a significant move this week, Lido, a popular Ethereum staking platform, unleashed the second version of its platform, Lido V2, allowing users to withdraw Ethereum (ETH) directly. This noteworthy advancement, along with the further decentralization of its network, demonstrates Lido's strategic drive toward providing an optimally secure and user-friendly staking experience.

Lido V2's unique selling point is its enabling of in-protocol withdrawals, offering stakers a 1:1 withdrawal ratio. This crucial development comes into play in a landscape where Lido controls a substantial 76% share of all liquid staked Ethereum. This innovation might have a profound effect on how Ethereum staking operates, with a whopping 46% of all staked Ethereum currently placed with liquid staking derivatives (LSDs).

The LSD market operates in a way that is considered to be a "winner-take-all" model, where liquidity and network effects symbiotically drive a continuous cycle of expansion. With Lido currently leading the race, the decentralization of its platform becomes a paramount consideration not only for its future but also for the wider Ethereum ecosystem.

Lido has consistently prioritized decentralization, as reflected in its system of node operators. At present, Lido boasts a roster of 30 node operators, who have undergone a rigorous vetting process by the Lido team. Following this, these operators are approved through a governance vote involving Lido's own token (LDO) holders, before being entrusted with the responsibility of acting as validators for all ETH staked with Lido.

As Lido's V2 unfolds, it could shape the future of Ethereum staking, tipping the balance further toward decentralization. This, in turn, fortifies Ethereum's network security and mitigates risks of centralization, ensuring the preservation of Ethereum's ethos of decentralization while facilitating growth in the staking sector.

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About the author

Arman Shirinyan is a trader, crypto enthusiast and SMM expert with more than four years of experience.

Arman strongly believes that cryptocurrencies and the blockchain will be of constant use in the future. Currently, he focuses on news, articles with deep analysis of crypto projects and technical analysis of cryptocurrency trading pairs.