Lido, a blockchain project that helps users earn yield from staking digital assets, has added support for Solana, expanding beyond existing offerings for Ethereum 2.0 and Terra.
Users can now stake on Solana and in return get new stSOL tokens that they can use to participate in decentralized finance (DeFi) projects on the blockchain, even when their staked tokens are locked up, according to a press release Wednesday.
Holders of stSOL could trade these derivative tokens or use them as collateral in DeFi, thereby generating additional yield. Staking, which involves locking crypto holdings to support the security and operations of a blockchain network in return for rewards, is perceived as less energy-intensive and potentially more scalable than the proof-of-work system that Bitcoin relies on.
Lido aims to have stSOL widely accepted as collateral in the DeFi ecosystem on Solana and other blockchains.
“There is the wormhole bridge that connects Solana with other leading blockchains such as Terra and Ethereum,” Felix Lutsch, chief commercial officer at Chorus One, told CoinDesk in a Zoom call. “The plan is to make use of that bridge to bring Lido staked assets from one chain to another.” Chorus One, a staking and interoperability solutions provider for over 20 decentralized networks, is building Lido’s liquid staking solution for Solana.
Lido has partnered with the likes of Curve Finance, Balancer and Terra’s Anchor Protocol in the past several months, bolstering acceptance in the DeFi world of its ether staking derivative token, stETH.
Lido already controls over 80% of the market for ether staking derivatives and is the largest non-custodial staking protocol for Ethereum and Terra. The decentralized autonomous organization (DAO) has amassed $6 billion in total value locked since the launch in December, according to the press release.
The DAO has commissioned two more development teams to launch liquid staking on Polkadot and Polygon to expand its position as the leading liquid staking solution
Solana, a “smart contracts” blockchain that aims to compete with Ethereum, has become one of the hottest cryptocurrency projects of 2021, with a $6 billion DeFi ecosystem. Prices for the blockchain’s SOL tokens have jumped 88-fold this year, for a market capitalization of nearly $80 billion that now ranks among the largest cryptocurrencies.
Ethereum is the largest smart-contract blockchain with DeFi applications holding $120 billion in assets, according to Defi Llama. Currently a proof-of-work blockchain, Ethereum plans to transition over the coming year to a proof-of-stake system known as Ethereum 2.0, but investors can already stake assets in a preliminary parallel version known as the Beacon Chain.
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