Welcome to this post, where we are going to see how Lido works, one of the main platforms for staking your Ethereum, Terra and Solana in a decentralized way.
Lido is one of the main platforms with more volume in staked cryptocurrencies, having only 3 options at the moment. This is because it offers liquid staking, which has a great advantage over traditional staking.
Where by staking, you will get a token that appreciates in value over the token you have staked, for example, in Solana, you will receive stSOL and this token you can use in other DEFI platforms, at the same time you generate the annual % that you can see in Lido, since stSOL appreciates in value with respect to SOL.
What is Lido
Lido allows users to staking their assets to get daily rewards. The user can stak any amount of tokens – no minimum.
When stkaing with Lido, you will mint staked tokens that are linked 1:1 to your initial staking. Staked tokens can be used throughout the DeFi ecosystem to achieve a better annual return.
Lido allows you to use your staked assets to achieve a higher return. Use your tokens (which earn daily staking rewards) as collateral, for loans, performance farming and more.
Lido DAO is a community that builds liquid staking services and governs the direction of Lido. The number of DAO participants grows daily with contributors working together to build the future of Lido.
Lido makes it very easy and simple to do staking on Ethereum, terra and Solana, which we will now look at in more detail. With the great advantage that allows you to increase your profitability.
In Ethereum the annual % you receive is 4.7% at the time of writing this, for staking in Lido. If we go to their home page and click on stake in etheruem it will take us to the panel for staking and with all the information.
The first thing to do is to click on the top right on connect wallet and connect our wallet with the Ethereum network. With the wallet connected, you will be able to indicate the amount, and see what you are going to receive as liquid staking. In the case of Ethereum, when staking etheruem, we will receive stETH. This token, appreciates in value with respect to Ethereum, so if we keep the same amount, after a while, we will be able to exchange our stETH for more Ethereum that we staked.
You will be able to see in Exchange rate the exchange, transaction cost and rewards fee, which is the commission that the platform takes on the rewards. That % is only from what you generate with the staking, not from what you deposit. Click submit and confirm in your wallet. Keep in mind the high commissions of the Ethereum network, so if you do staking, do it with a large amount, otherwise you will lose more in gas fee than what you get in staking.
With the transaction confirmed, you will be able to see your stETH in your wallet. With your stETH you can use them in other platforms to increase the annual % you get and raise this 4,7%. One of these platforms is curve, where you can deposit your stETH to provide liquidity to the platform and receive annual rewards for it. Another option is balancer, where you will also find liquidity pools with stETH to increase your annual %.
In Terra the annual % you receive is 7.8% at the time of writing this, for staking in Lido. If we go to their main page and click on stake in Terra it will take us to the staking panel with all the information.
The first thing to do is to click on the top right on connect wallet and connect your wallet. Here, you will be able to select bond Luna in stLuna or bLuna. Depending on the use you want to give to your Luna, where stLuna you can use it in different platforms to provide liquidity, and bluna you can use it in anchor protocol and nexus protocol to get a yield.
In the case of bluna, you will have to claim the rewards manually in the claim tab, while with stLuna, it is liquid staking and instead of claiming the rewards, when you want to exchange it for Luna, you will receive more Luna than when you deposited. You will be able to see the APY in both stLuna and bluna.
Indicate the amount of Luna you want to stake, indicate if you want stLuna or bLuna and click on bond, confirm in your wallet and that’s it. Note that to do the unbond process, which is to have Luna again, you will have to wait 21 days to receive your Luna in your wallet. This is due to the Luna staking process, which has these times. You can always sell in an Exchange like astroport your bluna or stluna for luna without waiting the 21 days, but you will receive a lower amount than if you wait the 21 days of unbond.
stLuna you can use it in the Mars protocol to get an extra %, while your bLuna you can use it in anchor. I recommend you first look at the different strategies in the two protocols, and choose to staking the option that interests you the most, either for profitability or for lower risk.
In Solana the annual % you receive is 6% at the moment we are writing this, for staking in Lido. If we go to their home page and click on stake in Solana it will take us to the staking panel with all the information.
The first thing to do is to click on connect wallet at the top right and connect our wallet. Here, you must indicate the amount you want to stake in Solana, and you will see below the amount received from stSOL, the change from stSOL to SOL, which is increasing over time, the cost of the transaction and the commission that the platform takes on the rewards. This 10% is on the rewards you receive from staking, not from depositing or withdrawing. Click on submit and confirm in your wallet.
This way, you will already have stSOL and you will be generating 6% per year with stSOL which appreciates with respect to SOL over time. The main advantage is that you can use stSOL on other DEFI platforms to increase that 6% per year. One of the platforms where you can use your stSOL to increase THE % you generate annually is orca, with different LP Tokens. You can also use stSOL on Saber and get an extra 2-3% per year. There are also other platforms like Sunny and different platforms in optimize farming where you can find stSOL to use it and increase your annual %.
I hope it has helped you to know how Lido works and its liquid staking function that is already used by many users. Remember that if you don’t have an account with binance, you can create one below.