Lido Finance and Optimism launch 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 by Optimism.
These tokens offer an additional OP reward for users who wager their tokensTransfer staked Ethereum to Optimism with Lido and provide liquidity for selected 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 support the scaling of the Ethereum network by offloading activities off the mainnet, stacking them, and then running that compressed data on the mainnet.
Lido Finance is the largest liquid stakes platform on the market, allowing users to deposit a variety of Proof-of-Stake (PoS) tokens and earn rewards for doing so. Rather than needing 32 ETH, which is a whopping $49,000 today, to start wagering on Ethereum, users can instead deposit any amount into Lido and start earning. The service is also available for, , and Kusama.
How does the Optimism, Lido program work?
In exchange for their ETH deposits, Lido users receive the stETH token, which can then be used elsewhereto generate returns or borrow.
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 stakes for those who don’t want to or can’t afford to pay mainnet fees,” said Jacob Blish, Lido’s head of business development and partnerships. “By incentivizing large wstETH liquidity for Optimism, encouraging adoption and contributing to ecosystem security.”
Therefore, users interested in that additional OP yield can do so by reaching out to what Lido has dubbed “priority pairs,” namely wstETH-ETH, as well as a host of otherspools.
Lido named, for example 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 an additional return in OP tokens.
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