- The Lido DAO community has approved with over 99% of the vote to enable the distribution of staking rewards via Aave v3 liquidity pools.
- LDO rewards are now distributed across Ethereum, Arbitrum, and Optimism blockchains.
- Users get rewards when they stake Ethereum (ETH) on Lido.
Lido, the liquid staking protocol for Proof-of-Stake (PoS) coins, will now distribute staking rewards in LDO, the native LidoDAO token, across three major Aave v3 liquidity pools.
Distribution via Aave v3 applies to staked Ether (stETH) liquidity pools via Ethereum, Arbitrum and Optimism.
Aave v3 for distributing Lido staking rewards
The news follows a community vote on a proposal for LDO reward distribution that received 99% support. With this development, each LDO “issuance administrator” on the three blockchain networks will have access to a wallet controlled by Lido.
Aave, which offers a smart-contracts-enabled non-custodial liquidity protocol, recently deployed its v3 on Ethereum. The DeFi platform had already launched the Aave v3 protocol on the Layer 2 blockchains Arbitrum and Optimism.
In 2022, Lido DAO announced it would offer stETH rewards to liquidity providers on both Arbitrum and Optimism to drive further adoption of the staking protocol.
Lido users can stake any amount of ETH and earn daily rewards, with LDO then allowing users to participate in the entire DeFi ecosystem even if their staked ETH remains locked. In particular, Ethereum will allow withdrawal of staked ETH following the upcoming network upgrade dubbed “Shanghai”. The hard fork is expected in early March this year.
Between January 30th and February 6th, 2023, the amount of ETH wagered on Lido exceeded 5.05 million, with over 1.95 million LDO rewards already live in February. According to the Lido team, this follows a surge in new credit pools on Ethereum.
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