Polkadot’s Moonbeam Adds Liquid Staking Giant Lido

The integration was facilitated by staking specialist MixBytes.

AccessTimeIconMay 31, 2022 at 12:00 p.m. UTC
Updated Apr 10, 2024 at 1:59 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now

Polkadot is bringing liquid staking to its network of blockchains, allowing cryptocurrency owners who’ve pledged to support the proof-of-stake (PoS) network an avenue to increase their revenue streams by earning additional yield in decentralized finance (DeFi) applications.

Moonbeam, a connectivity layer between the Ethereum blockchain and services being built on Polkadot, is working with Lido, a staking derivatives platform that allows ether (ETH) and other cryptos locked up in staking contracts to be used elsewhere.

  • Why Proof-of-Stake Works Like a 'Pawn Shop': 5 Questions With Nansen's Nik Polk
    Why Proof-of-Stake Works Like a 'Pawn Shop': 5 Questions With Nansen's Nik Polk
  • Staking Is 'Definitely a Positive' for the Spot Ether ETF Narrative, Analyst Says
    Staking Is 'Definitely a Positive' for the Spot Ether ETF Narrative, Analyst Says
  • Tax Expert Breaks Down the Crypto Tax Basics for Beginners
    Tax Expert Breaks Down the Crypto Tax Basics for Beginners
  • German Finance Heavyweights Develop Fully-Insured Crypto Staking Offering
    German Finance Heavyweights Develop Fully-Insured Crypto Staking Offering
  • The move to bring Lido’s liquid staking to Polkadot was also facilitated by blockchain auditing and staking specialist MixBytes, the companies announced on Tuesday. In February, the same group unveiled liquid staking on Kusama, Polkadot’s so-called canary network, an experimental version of the blockchain.

    Under liquid staking, cryptocurrency owners who’ve pledged to support proof-of-stake networks by dedicating their tokens to the process, receive a kind of staked IOU token. That token can then be invested to earn yield in DeFi apps.

    The Lido integration enables holders of Polkadot’s native cryptocurrency, DOT, to stake their assets in the form of xcDOT (cross-chain DOT), for which they receive an stDOT (staked DOT) token. Both xcDOT and stDOT are XC-20 tokens, a token standard created by Moonbeam for compatibility between the Ethereum Virtual Machine (EVM) and the Substrate framework that powers Polkadot.

    Moonbeam, which went live in January after raising over $1.3 billion to secure a parachain slot on Polkadot, has been assembling the infrastructure and tools needed to harmonize activity across multiple blockchains, said the platform’s CEO Derek Yoo. Lido, with some $8 billion in locked value on Ethereum alone, is an important integration, he added.

    “Liquid staking is really a basic building block of the ecosystem,” Yoo said in an interview. “We’re positioning Moonbeam as the best place to make multichain apps, as we believe there’s a shift from people deploying apps with a single chain to deploying them to multiple chains, which is part of why we chose to build on Polkadot.”

    As well as the smart contract-based application that lives on Moonbeam, there’s also a component that lives on the Polkadot relay chain, the ecosystem’s rule-enforcing centerpoint that handles blockchain security and staking services in particular, explained Yoo.

    “Behind the scenes, these specialized components are being combined to present one simple application to the user,” he said. “That’s a little bit of our thesis in a nutshell: Apps are going to start to be built with multiple specialized chains, but at the same time, you’re kind of hiding the complexity away.”

    Part of Lido’s concept as a decentralized autonomous organization (DAO) is that any team can create liquid staking on any chain, according to Lido founding member Konstantin Lomashuk. Still, liquid staking on Polkadot was difficult, Lomashuk added, pointing out that Polkadot’s cross-chain communication format (XCM), which the integration leveraged, was only delivered three weeks ago.

    “It was quite hard to develop because you have these two different blockchains that communicate, the relay chain and parachain, and you also need to redistribute the stake on different validators,” said Lomashuk in an interview. “So it took a lot of research, but has made a great addition to our product line, where institutional and retail users can get liquid staking of the same quality on Polkadot as they do on Ethereum.”


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

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

    Ian Allison

    Ian Allison is an award-winning senior reporter at CoinDesk. He holds ETH.

    Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.

    Read more about