Lido Finance and Optimism are launching a new incentive program to encourage liquid stakers to migrate to the Layer 2 network.
As part of the LidoOnLayer2 initiative, which aims to improve the liquidity of Lido’s staked Ethereum (stETH) product across all Layer 2 solutions, Optimism has awarded the project 1 million OP tokens.
These tokens provide an additional OP reward for users who stake their Ethereum at Lido, shifting this staked Ethereum to Optimism and providing liquidity for specific token pairs. The program starts today and ends in six months.
OP is the governance token for Optimism, a layer 2 scaling solution that uses rollups to scale the Ethereum network by moving activity out of mainnet, stacking it, and then running that compressed data on mainnet.
Lido Finance is the largest liquid staking platform on the market, allowing users to deposit a variety of Proof-of-Stake (PoS) tokens and earn rewards for doing so. Instead of needing 32 ETH, around $49,000 today, to start staking Ethereum, users can deposit any amount with Lido and start earning. The service is also available for Polygon, Solana, Polkadot and Kusama.
How does the Optimism and Lido program work?
In exchange for their ETH deposits, Lido users receive the stETH token, which can then be used elsewhere in DeFi for performance or lending.
Through this new agreement with Optimism, users who decide to move their stETH to the Layer 2 network will now receive additional rewards in the form of Optimism’s native OP token.
It is important to note that users will not migrate stETH to Optimism. As Lido expands to a variety of different Layer 2 networks instead, the available asset is packaged in stETH (wstETH). This particular asset is more compatible and easier to integrate with cryptographic protocols.
“The value of wstETH in Optimism is that it further democratizes access to liquid staking for those who don’t want or can’t afford mainnet fees,” said Jacob Blish, Lido’s head of business development and partnerships. “Incentivizing large wstETH liquidity for optimism, promoting adoption and contributing to ecosystem security.”
Therefore, users interested in getting this extra power from OP can do so by contacting what Lido has called “priority pairs”, specifically wstETH-ETH, as well as a number of other stablecoin pools.
For example, Lido has named Aave as a project that would benefit from the program. This means that users depositing their wstETH with the popular DeFi lender via Optimism can earn additional returns in OP tokens.
Stay up to date on crypto news and receive daily updates in your inbox.
Source: decrypt.co
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers
Comments are closed.