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Ethereum staking service provider Lido announces layer-two extension

19-Jul-2022 By: Rohit Tripathi
Ethereum staking ser

Ethereum staking service provider Lido announces layer-two extension

Lido Finance, a cryptocurrency staking service provider, has announced intentions to increase staked Ether (stETH) support throughout the Ethereum Layer 2 network ecosystem.

The Lido team announced in a blog post on July 18 that it will first allow Ether staking over bridges to L2s utilizing wrapped stETH (wstETH). The L2s will ultimately allow users to stake without having to "bridge their assets back" to the Ethereum mainnet in the future.

In terms of partnered L2s, the team said that prior to the announcement, it has already integrated its bridging staking services with Argent and Aztec. It also stated that the following group of alliances and mergers would be revealed over the next weeks.

The Lido team stated that once the fully-fledged L2 staking support is prepared, it would initially begin with L2 powerhouses Arbitrum and Optimism before branching out to additional L2s that have enough "demonstrated economic activity."

The team boasted that this change would allow users to stake ETH with cheaper fees and provide them access to a new set of DeFi apps to increase returns because L2s are made to minimize the cost of Ethereum transactions.

“L2s come in a variety of types. We anticipate that in the future, both general-purpose and application-specific Layer 2 networks will get a significant share (if not the majority) of economic activity and transaction volume.”

“Staking solutions will be advantageous to or necessary for each of these networks in order to support the economic activities of its users and guarantee that every user of the Ethereum ecosystem networks is able to take part in safeguarding Ethereum,” the report said.

According to Lido’s website, Lido is one of the largest providers in terms of total stETH value and ranks second overall in terms of total value locked (TVL) in decentralized finance (DeFi) platforms, which states that it currently has more than 4.2 million ETH staked on the platform, valued at approximately $6.5 billion.

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