Lido Finance Review: Lido Crypto Pros, Cons, & Features

Table of Contents

Introduction

Staking is now becoming a popular service in the crypto community, with forecasts of rapid growth. Typically Lido Finance.

According to a JP Morgan report, staking is generating up to $9 billion in annual revenue thanks to Ethereum’s current proof-of-work consensus. Expectedly, after Ethereum updates its proof-of-stake protocol. Revenue from this field will increase to 40 billion USD by 2025.

In this context, DeFi staking protocols such as Lido Finance have emerged. Giving users the ability to stake their tokens while maintaining custody and liquidity.

https://lido.fi/

Lido Finance is a decentralized autonomous organization (DAO). Provides the ability to stake crypto assets in a non-custodial, decentralized, secure, trusted manner. Often gives users more attractive staking rewards.

Pros and Cons of Lido

Pros of Lido

Below are some of the reasons that make Lido the right staking platform for hundreds of thousands of ETH stakers.

User Friendly

Lido Finance uses a simple, convenient interface so ETH holders can stake their cryptocurrency with ease. With just a few clicks, you can stake ETH and stETH (stake ETH) in your wallet. Furthermore, the fee structure and transaction costs are transparent before you connect your wallet. Helps you have the convenience of deciding whether you want to deposit with Lido or not.

Once your ETH is staked and generate passive income on Lido. You will receive an equivalent amount of stETH (stake ETH) to use in the DeFi ecosystem. With stETH, you can provide liquidity to exchanges on Lido or other platforms. Even engage in lending on certain platforms.

Decentralized Structure

Lido actively uses the DAO governance structure for its operations. Those who believe in Lido can use LDO tokens to vote for updates. Recommended for the overall foundation and direction of the organization.

Cons of Lido

Lido has some disadvantages that you should be aware of if you are someone interested in generating the best profits with your staking. These include:

Semi-custodial Services

We call Lido’s staking pool service at least semi-custodial because it is distributing user ether across its validator nodes. However, stETH acts as a placeholder for the user’s staked ETH. So they can exchange at any time.

Fee

Although reward staking fees are not uncommon in staking services. Lido charges a 10% staking reward on any amount you earn. This 10% fee is split between node operators and the protocol’s treasury.

Tax

Depends on your personal situation and location. Ether rewards from staking with Lido may be taxable. Although tax regulations are not Lido’s responsibility. But due to its decentralized nature of finance. You may not receive the necessary tax forms to easily report income from ETH staking.

Who Is Lido Finance Best For?

Lido Finance is an excellent choice for many investors. Looking at using ETH as a means to profit from the cryptocurrency market. Instead of buying and holding ETH in the hope that the price will increase. You can freely stake as you like. At the same time, derivative tokens can still be used on other platforms.

New investors in the cryptocurrency sector. Especially those who are interested in staking and want to experience a user-friendly platform to stake their ETH.
Those interested in learning more about the potential of the staking-as-a-service model.
Investors who are confident about staking and want the ability to freely move their staked ETH. Through different DeFi protocols.

Key Features of Lido

Lido has become one of the suitable choices for both investors and users. Some of the outstanding features include:

Easy Staking: Lido users can easily stake their assets to earn daily rewards. The lack of a minimum number of tokens that can be staked increases flexibility.
Maximum earning potential: All users on the platform can use their tokens. As collateral to engage in lending, yield farming and other activities. This opens up maximum opportunities for users to benefit from earnings.
Native Token: Lido has a token called LDO, listed on many reputable exchanges such as SushiSwap, Uniswap, Hoo, 1inch, Hotbit, DeversiFi and Bilaxy, providing users with liquidity clause.
Quality audit: Lido’s smart contracts are inspected and quality assured by quality control units.
Types of wallets: Although Lido does not have its own wallet. But users can use some popular wallets on the market. Including DeFi wallets like TrustWallet and MetaMask. Help them easily manage their assets.

Cryptocurrency Listed on Lido

Users can stake not only ether but also many other assets on the Lido platform. Here are some sequences that work with Lido:

1. Solana (SOL):Users can stake SOL to receive stSOL. The APR rate is approximately 5.5%. Your SOL remains active throughout the Solana ecosystem.

2. Kusama (KSM):KSM can be staked to receive stKSM, with an APR rate of 21.1%. You can avail daily stake rewards from your KSM. Your stKSM will participate in DeFi activities on the Kusama and Moonriver ecosystems.

3. Polkadot (DOT):DOT can be staked to receive stDOT. With an average APR rate of 16.5%. You will receive daily DOT staking rewards. Also contribute to the DeFi ecosystem on Polkadot and Moonbeam.

4. Polygon (MATIC):MATIC can be staked to receive stMATIC, with an APR rate of 8.7%.

Alternatives to Consider

Lido is one of the most trusted staking-as-a-service platforms for both traders and investors. But in case you feel it is not suitable. Consider the following alternatives:

ByBit: Good For Crypto Traders Who Want To Maximize APY

ByBit offers flexible DeFi staking, mining, and an APY of up to 400%.

KuCoin: Good for Centralized Staking

KuCoin is a centralized exchange that supports dozens of cryptocurrencies. Multi-stake options, high interest rates and even crypto lending.

Nexo: Good For Long-Term Stakeholders

Nexo supports more than 35 cryptocurrencies. Offers compound interest for long-term investors and offers up to 16% annual interest.

Is Lido Right For You?

With solid fundamentals, strong ecosystem, and trustworthy community. Lido is becoming one of the suitable ETH staking platforms for both traders and investors. If you are looking for a user-friendly platform. Where you can stake your ETH, earn daily rewards. And do all that while retaining the freedom to move your staked ETH. Through different DeFi protocols. Then Lido may be the exact choice you are looking for.

Views on Lido

The road to ETH 2.0 where Lido merges with DeFi is in a safe and favorable position on the Ethereum network. Lido provides users with a new means to stake ETH on Ethereum’s new beacon chain. But still retain access to their ETH value.

Although Lido has attracted global attention in the DeFi sector. But still a project that those in the crypto community should keep an eye on. With a friendly interface, easy to use. Sustainable APY returns and a loyal community of supporters. It can be said that Lido has posed great opportunities and will continue to grow.