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$2 million for a staking solution on Ethereum 2.0
$2 million for a staking solution on Ethereum 2.0
Ethereum

$2 million for a staking solution on Ethereum 2.0

By Marco Cavicchioli - 15 Dec 2020

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Staking ETH on Ethereum 2.0’s new blockchain, Beacon Chain, means locking them for many months

In fact, until the current blockchain is “linked” to the new one, the ETH locked on the Ethereum 2.0 deposit contract cannot be unlocked

That will happen in several months, perhaps in 2021 or maybe even 2022, so those who want to stake their ETH today must necessarily keep them locked for several months.

However, DeFi tools allow getting around this problem. 

One such tool, Lido, is about to launch its own mainnet that will allow users to stake ETH on its protocol in exchange for an equal amount of stETH tokens (staked ETH).

This will allow users to stake their own ETH tokens, but have other stETH tokens representing them on an equal basis for use in other DeFi protocols. 

The stETH tokens can only be redeemed when the staked ETH tokens are released, i.e. when the Beacon Chain is linked to the current Ethereum blockchain, by returning them to the Lido protocol and getting back all the staked ETH.  

In return, Lido keeps a 10% commission on the rewards received for staking, but unlike other similar solutions, such as those offered by centralized exchanges, it is non-custodial. 

A decentralized solution for staking with Ethereum 2.0

This is a decentralized solution that allows users to have full control of private keys, i.e. exclusive ownership of ETH and stETH. 

Lido Finance has announced that it has raised $2m in funding for the launch of its mainnet, which is expected to take place in December. 

Investors include Semantic Ventures, ParaFi Capital, Terra, Stakefish and Staking Facilities, as well as business angels such as MakerDAO’s Rune Christensen, Aave’s Stani Kulechov and Synthetix’s Kain Warwick.

In fact, the testnet of the protocol has already been available on Ethereum Goerli since the end of November, but the testing process has not yet been completed. Thanks to this new funding, the launch of the mainnet is expected to take place by the end of the month.

 

Marco Cavicchioli
Marco Cavicchioli

Class 1975, Marco teaches web-technologies and is an online writer specializing in cryptocurrencies. He founded ilBitcoin.news, and his YouTube channel has more than 25 thousand subscribers.

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