A16z Investing $70M in Ethereum Staking Provider Lido Finance

The firm also used Lido to stake a portion of a16z Crypto’s ether holdings on the Beacon Chain.

AccessTimeIconMar 3, 2022 at 6:51 p.m. UTC
Updated Mar 3, 2022 at 7:10 p.m. UTC

Brandy covers crypto-related venture capital deals for CoinDesk.

Venture capital firm Andreessen Horowitz (a16z) has invested $70 million in Lido Finance, a liquid staking provider that makes it easier to stake ether and other proof-of-stake (PoS) assets. The firm also used Lido to stake an undisclosed portion of a16z Crypto’s ether holdings on the Beacon Chain.

  • The Ethereum blockchain plans to switch this summer from its current proof-of-work validation system to PoS, which is more energy efficient and lets users validate network transactions through temporary token deposits (or staking) in exchange for rewards.
  • Ethereum needs to encourage ether holders to stake their tokens or a secure PoS transition won’t be possible, which is where Lido Finance comes in.
  • “Lido solves the competitive incentives between staking and seeking yield in DeFi. By issuing an Ethereum-native liquid token, Lido allows you to use staked ETH as collateral within DeFi in the same way you can use ETH currently,” wrote a16z Crypto’s Daren Matsuoka and Porter Smith in the announcement post.
  • Last summer, a16z launched a $2.2 billion crypto fund that was the largest ever for the industry until Paradigm announced a $2.5 billion fund in November.

Read more about

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

CoinDesk - Unknown

Brandy covers crypto-related venture capital deals for CoinDesk.

CoinDesk - Unknown

Brandy covers crypto-related venture capital deals for CoinDesk.

Trending

1
CoinDesk - Unknown
Blockchain.com, Deribit Among Creditors That Pushed for 3AC Liquidation: Report

Blockchain.com has also said it is cooperating with ongoing investigations into the hedge fund, which "defrauded the crypto industry."

CoinDesk - Unknown
2
CoinDesk - Unknown
El Salvador Purchases 80 Additional Bitcoin at $19K, President Bukele Says

The last purchase by the Central American country had been in May.

CoinDesk - Unknown
3
CoinDesk - Unknown
VanEck Files New Application for Spot Bitcoin ETF

The application comes about eight months after the SEC rejected the investment firm’s last application.

CoinDesk - Unknown
4
CoinDesk - Unknown
First Mover Asia: Speculating on Tokenized Carbon Offsets Won't Help Climate Crisis, Says Consultant; BTC Falls Under $19K Amid Wider Crypto Woes

A significant number of carbon credits are from projects 8-10 years old; Ether and other major altcoins plummet.

CoinDesk - Unknown