Lido Finance has launched its liquid staking application for institutional clients who want to stake large amounts of ETH.
Introducing Lido Institutional.https://t.co/Ucs9oIL0i0 pic.twitter.com/TlCA9hRJQS
— Lido (@LidoFinance) August 2, 2024
The benefit of using middleware like Lido is that users can delegate any amount of ETH rather than the 32 ETH minimum associated with staking as a validator.
They also get to hold liquid positions as staking on the platform provides users Lido Staked ETH (STETH) tokens that match the ETH they staked.
That offers them a capital-efficient advantage of using the STETH tokens on other DeFi protocols to earn yields above the staking rewards—a feature missing from traditionally staking ETH.
In an announcement, Lido revealed its offering for institutions, “Introducing Lido Institutional.”
It further stated, “Trusted by a growing list of prominent institutional partners, Lido already stands out as a premier choice for many institutions looking to engage in Ethereum staking.”
About how this differs from its regular liquid staking application, Lido mentioned, “Its middleware solution combines the reliability and security necessary for enterprise-grade staking with the liquidity and utility required for diverse institutional strategies.”
Lido’s total value locked (TVL) boasts over 28.5% of all staked ETH in the market, making it the biggest liquid staking protocol.
With that, Lido is already the choice of several institutional clients. The new staking implementation launched specifically for such clients will bring improved security integrations obviously needed to oversee the safe handling of large volumes of ETH.
Over the past few months, it has teamed up with big names in the custody infrastructure provider space, including Taurus and Fireblocks. These storage integrations will handle the massive volumes of ETH staked in Lido’s institutional liquid staking pools.
Nevertheless, increased institutional adoption of Lido’s liquid staking application and liquid staking protocols in general will be interesting to watch, with regulatory woes looming.
The US Securities and Exchanges Commission (SEC) has claimed Lido offers unregistered investment contracts with its liquid staking utility in a suit brought against Consensys a few months ago. Lido’s biggest competitor, Rocket Pool, has also been alleged to do the same.
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