What Is Lido? Lido Crypto Explained
Last Updated: June 2026
Lido Finance is one of the most significant infrastructure projects in decentralized finance, solving a problem that has affected proof-of-stake blockchains since Ethereum's transition away from mining: the liquidity problem of staking. When you stake ETH natively, your assets are locked and inaccessible. Lido changed this with liquid staking, issuing a tradeable token called stETH in exchange for staked ETH. The protocol's native governance token, LDO, gives holders a say in how the protocol operates. Whether you're exploring crypto futures or looking to understand DeFi fundamentals, Lido's mechanics are worth knowing in depth.
How Lido's Liquid Staking Works
Traditional ETH staking requires 32 ETH to run a validator node — a barrier that excludes most retail participants. Lido pools deposits from many users, delegates them to a curated set of professional validators, and issues stETH tokens at a 1:1 ratio to the deposited ETH. These stETH tokens are rebasing: the balance in your wallet updates daily to reflect accrued staking rewards, meaning you do not need to claim rewards manually.
The key advantage is that stETH remains liquid. Unlike natively staked ETH, stETH can be transferred, sold on secondary markets, supplied to lending protocols as collateral, or used in liquidity pools. This composability made Lido central to a wide range of DeFi strategies, and it is why the protocol rapidly accumulated billions of dollars in total value locked shortly after launch.
Lido also supports liquid staking on other proof-of-stake networks, including Polygon and Solana, where it issues equivalent liquid tokens. However, Ethereum remains by far the largest share of Lido's activity.
The LDO Governance Token
LDO is an ERC-20 token that grants voting rights in the Lido DAO (Decentralized Autonomous Organization). Token holders can propose and vote on changes to the protocol, including:
- Fee parameters — Lido charges a 10% fee on staking rewards, split between node operators and the DAO treasury. LDO holders can vote to adjust this.
- Validator onboarding — The DAO votes on which professional node operators are admitted to the validator set, directly influencing network security and decentralization.
- New asset integrations — Adding support for staking on new proof-of-stake chains requires a governance vote.
- Treasury spending — Grants, audits, and protocol development funding are all subject to DAO approval.
LDO does not entitle holders to a share of protocol revenue directly. Its value is tied to governance utility and the broader growth of the Lido ecosystem. As Lido's total value locked grows, the influence of LDO governance over a larger asset base increases, which is the primary value proposition for long-term holders.
Lido vs. Alternative Staking Options
When evaluating Lido, it helps to compare it with other approaches to ETH staking:
| Method | Min. ETH Required | Liquidity | Custody | Reward Access | |---|---|---|---|---| | Native solo staking | 32 ETH | None (locked) | Self-custodied | After unstaking | | Centralized exchange staking | Any amount | Limited | Custodial | Varies by platform | | Lido liquid staking | Any amount | Full (stETH) | Non-custodial | Continuous (rebasing) | | Rocket Pool (decentralized) | Any amount | Full (rETH) | Non-custodied | Continuous |
Lido's main competitive advantages are its deep liquidity for stETH, its integrations across major DeFi protocols, and the scale of its validator network. Its main criticism is centralization risk: Lido controls a large share of staked ETH, which raises concerns among Ethereum researchers about validator concentration. The Lido DAO is actively working on solutions, including distributed validator technology, to address this.
Trading LDO on EVEDEX
For traders who want exposure to LDO without holding the token on-chain, EVEDEX offers a direct solution. EVEDEX is a decentralized crypto exchange built for perpetual futures, and LDO perpetuals are available with adjustable leverage. This means you can go long if you expect Lido's ecosystem to grow, or short if you anticipate headwinds such as regulatory pressure on staking protocols or declining ETH staking yields.
Trading LDO perpetuals on EVEDEX differs from spot trading in that there is no expiry date and positions are settled in stablecoins, so you are not exposed to gas fees from actual staking operations. For traders who track DeFi protocol metrics — TVL growth, stETH peg stability, governance activity — LDO perpetuals provide a capital-efficient way to act on that analysis. EVEDEX's non-custodial structure means you retain control of your funds throughout the process, consistent with DeFi principles that Lido itself is built on.
