Lido Finance and Optimism are launching a new incentive program to migrate liquid stakers to the Layer 2 network.
As part of the LidoOnLayer2 initiative, which aims to improve liquidity for Lido's staked Ethereum (stETH) product across all Layer 2 solutions, the project was granted 1 million OP tokens from Optimism.
These tokens provide an additional OP reward for users who stake their tokens ether With Lido, transfer staked Ethereum to Optimism and provide liquidity for select 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 help scale the Ethereum network by offloading activities from the mainnet, batching them, and then executing that compressed data on the mainnet.
Lido Finance is the largest liquid staking platform on the market, allowing users to make a variety of deposits Proof of use (PoS) tokens and earn rewards for them. Instead of requiring 32 ETH, which is equivalent to a whopping $49,000 today, to start staking on Ethereum, users can instead deposit any amount into Lido and start earning. The service is also available for Polygon, Solana, Speckleand Kusama.
How does the Optimism, Lido program work?
In return for their ETH deposits, Lido users receive the stETH token, which can then be used elsewhere DeFi to generate returns or take out loans.
Through this new agreement with Optimism, users who choose to move their stETH to the Layer 2 network will now receive additional rewards in the form of Optimism's native OP token.
Importantly, users do not migrate stETH to Optimism. Instead, as Lido expands to a variety of different Layer 2 networks, Wrapped stETH (wstETH) will be the available asset. This particular asset is more compatible and easier to integrate with crypto protocols.
“The value of wstETH to Optimism is that it further democratizes access to liquid staking for those who do not want to or cannot afford to pay mainnet fees,” said Jacob Blish, head of business development and partnerships at Lido. “By incentivizing large wstETH liquidity for Optimism, driving adoption and contributing to ecosystem security.”
Therefore, users interested in this additional OP yield can do so by turning to what Lido has dubbed “priority pairs,” namely wstETH-ETH as well as a variety of others Stablecoin pools.
Lido named Spirit, for example as a project that would benefit from the program. This means that users who deposit their wstETH to the popular DeFi lender via Optimism can earn additional yield in OP tokens.
Stay on top of crypto news and receive daily updates in your inbox.
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers
Comments are closed.