What is Lido DAO (LDO)?

Deep Dive

1. Purpose & Value Proposition

Lido solves Ethereum’s staking illiquidity. Traditional staking locks ETH until withdrawals are enabled, but Lido lets users stake any amount and receive stETH—a liquid token that accrues rewards and can be used across DeFi. This bridges staking rewards with liquidity, a critical innovation for Ethereum’s proof-of-stake ecosystem.

2. Technology & Architecture

Built on Ethereum, Lido uses smart contracts to pool ETH from users and distribute it to node operators for staking. Its architecture includes a decentralized network of validators and an oracle system to update stETH balances. Security is ensured through audits by firms like OpenZeppelin and Certora.

3. Governance & Tokenomics

The LDO token governs protocol decisions, including fee structures, validator onboarding, and treasury management. In July 2025, Lido introduced Dual Governance, allowing stETH holders to delay or block proposals by locking tokens in an escrow. For example, 1% of stETH supply can trigger a 5–45 day delay, while 10% initiates a “rage quit” to protect users from governance attacks.

Conclusion

Lido DAO is a cornerstone of Ethereum’s staking economy, combining liquidity with decentralized governance. Its unique Dual Governance model addresses centralization risks while maintaining flexibility. As Ethereum evolves, how will Lido adapt to balance scalability, security, and community control?