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What is the LDO token used for?

How Lido uses the LDO token. Lido is a DAO that provides a non-custodial staking service for Ethereum, Solana and Luna currently.

What is the LDO token?

The governance token of Lido.

What is the LDO token used for?

What is Lido?

Lido is a DAO that provides a non-custodial staking service for Ethereum, Solana and Luna currently.

For example, Users can stake any amount of ETH, receive staking rewards and have their ETH liquid, in the form of stETH.

How does Lido work?

During phase 0 – 1.5 of Ethereum 2.0 users wanting to stake ETH on the beacon chain need to:

  • Lock their ETH indefinately.
  • Supply 32 ETH
  • Run a validator

With Lido a user deposits ETH

  • ETH is distributed to validator.
  • User receives stETH.
  • stETH can be used like any ERC-20.
  • stETH tracks the balance the user would have while staking on the ETH 2.0 beacon chain.

The user doesn’t have to run a validator node and also have their assets liquid during phase 0 – 1.5 of ETH2.

Current statistics for stETH are here.

Lido uses

  • LDO for governance
  • stTokens for the staking derivatives (stETH, stSOL etc.)

Fees

  • 10% fee on staking rewards. Split between node operators, the DAO, and an insurance fund.

Every oracle update

Recalculates the stETH token ratio.

  • If staking rewards > slashing penalties the system registers a profit.
  • stETH token balances will increase and Lido would apply a 10% fee

Slashing of validators

  • Part of the Lido fee is transferred to slashing insurance to mitigate this.

Voting

  • Lido DAO govern the liquid staking protocols and decides on fees and upgrades.

To have a vote in the Lido DAO

  • Voter must hold LDO.
  • LDO voting weight is proportional to the amount of LDO a voter stakes in the voting contract (can also be changed through governance).

More here.

LDO tokenomics

Total supply: 1 000 000 000 LDO

View all funds in the DAO here.

Unlocked

  • DAO treasury – 36.32% (0.5% Airdrop to early stETH users)

Locked 1 year and then vested 1 year

  • Investors – 22.18%
  • Validators and signature holders – 6.5%
  • Initial Lido developers – 20%
  • Founders and future employees – 15%

Claim LDO tokens

0.5% of LDO supply is distributed to early depositors of ETH that received stETH.

If you’re eligible you can claim tokens here.

Docs

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LDO price

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