LDO token is
The governance token for Lido.
LDO token is used for
- Voting on proposals
How could value accrue to the LDO token?
Most governance tokens offer potential value for token holders through protocol 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.
- 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).
Total supply: 1 000 000 000 LDO
View all funds in the DAO here.
- 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.