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What is the LDO token used for?

How Lido uses the LDO token. Lido is a DAO provides a non-custodial liquid staking service for Ethereum 2.0.

LDO token is


The governance token for Lido.

LDO token is used for


How could value accrue to the LDO token?


Most governance tokens offer potential value for token holders through protocol fees.

Fees

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

What is Lido?


Lido is a DAO that provides a non-custodial staking service for Eth 2.0. Users can stake any amount, 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 beacon chain need to:

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

Lido wants to make this easier.

Lido uses two tokens

  • LDO for governance
  • stETH as tokenized staked ETH on the beacon chain.

A user deposits ETH to Lido.

  • 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 is here.

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.

Token issuance


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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