Ethereum 2.0 (Eth2) staking protocol Lido Finance has raised $73 million in fresh funding.
The funding was led by crypto venture capital firm Paradigm, which bought $51 million worth of LDO tokens from LidoDAO’s treasury by paying the amount in 15,120 ether (ETH).
The rest of the amount, i.e., $22 million, was contributed by a range of investors, including Coinbase Ventures, Three Arrows Capital, Jump Trading, Alameda Research, Digital Currency Group, and several others.
Lido is a “liquid” Eth2 staking protocol, meaning it allows users to unlock staked ETH and use it in various DeFi applications to earn yield. Lido allows that by issuing its native token stETH for every ETH staked via its protocol. stETH is a tokenized version of staked ETH.
With fresh capital at hand, Lido plans to facilitate the integration of stETH across Ethereum’s DeFi ecosystem, as well as other proof-of-stake (PoS) blockchains such as Solana and Terra, Lido’s CMO Kasper Rasmussen told The Block.
Arjun Balaji, Paradigm’s investment partner, told The Block that the venture firm is “excited by Lido’s potential to offer the leading decentralized staking solution for ETH2 and other PoS chains.”
Lido’s staking solution is decentralized, meaning it does not rely on a single party’s private key management, such as centralized crypto exchanges’ staking services. Lido charges a 10% fee on staking rewards, according to information on its website.
ETH2 is a popular asset for staking. The Eth2 staking contract now has more than 4 million ETH, which is worth nearly $14 billion at current prices, according to The Block’s Data Dashboard.