Key Research Insights
- Lido's Mission: Selected by the Ethereum community to counter centralized exchanges (CEXs), Lido serves as a staking pool committed to ETH 2.0 decentralization. If Lido becomes the largest staking pool, LDO’s governance value implicitly includes partial governance over ETH itself.
- stETH's Edge: stETH boasts liquidity-driven moats and strong network effects. Lido is poised to become the DeFi protocol with the highest TVL before ETH 2.0 launches.
- Valuation: LDO is significantly undervalued for short-term investors, while its long-term valuation remains reasonable.
Project Overview
1. Business Scope
Lido provides staking pool services for PoS blockchains, currently supporting ETH 2.0 and Terra, with plans to expand to Solana and others.
- TVL: Over $2.8 billion ($1.75B in ETH, $1.1B in LUNA).
- Source: Lido.fi
2. Funding History
- Seed Round (Dec 2020): $2M from Semantic Ventures, ParaFi Capital, Terra, and others.
- Series A (Apr 2021): Sold 100M LDO for 21,600 ETH ($75M at the time). Investors include Paradigm, Three Arrows Capital, and Coinbase Ventures.
3. Team
- Founders hail from P2P Validator, a leading non-custodial staking platform.
- Key members: Konstantin Lomashuk (Satoshi Fund), Vasiliy Shapovalov (CTO), and Kasper Rasmussen (ex-Bitfinex).
- Paradigm’s Influence: Researchers Georgios Konstantopoulos, Hasu, and Arjun Balaji played pivotal roles in Lido’s decentralization roadmap.
4. Milestones
- 2020: Launched ETH staking and Lido DAO.
- 2021: Expanded to Terra, integrated stETH with DeFi protocols (Curve, Aave), and updated withdrawal credentials for non-custodial staking.
Business Analysis
1. Industry Outlook
- Regulatory Shift: PoS chains like ETH 2.0 align with ESG goals, attracting institutional interest (e.g., Sygnum Bank, Goldman Sachs).
- Market Potential: Staking could grow into a $40B industry, with ETH 2.0 driving adoption.
2. Competitive Edge
stETH Integrations:
- DEXs: Curve (deepest liquidity), SushiSwap, Bancor.
- Lending: Proposals for Aave, Maker, and Compound.
- Other: Yearn, Convex, and Nexus Mutual partnerships.
- DeFi Composability: stETH enables yield stacking (e.g., staking + lending), reducing opportunity costs.
3. Risks
- ETH 2.0 Delays: Beacon Chain withdrawals remain locked until 2022.
- Smart Contract Vulnerabilities: Audited by Sigma Prime but risks persist.
- Centralization: Early deposits relied on an 11-signature multisig (mitigated post-July 2021).
Tokenomics (LDO)
- Governance: LDO holders vote on key decisions (e.g., node operators, fee structures).
- Supply: 1B total; 32.18% to investors (unlocks Dec 2021–May 2022).
- Revenue: 10% of staking rewards go to DAO (currently allocated to insurance/validators).
Valuation Metrics
| Metric | LDO (Circulating) | LDO (Fully Diluted) | Uniswap | Aave |
|-----------------|-------------------|---------------------|---------|----------|
| P/S Ratio | ~1 | 20–40 | 50+ | 30 |
| TVL | $2.8B | $2.8B | $6B | $12B |
Conclusion: Short-term undervaluation (low circulating supply), long-term fair valuation.
FAQs
Q: How does stETH maintain peg to ETH?
A: stETH’s daily rebasing and Curve liquidity pools ensure tight 1:1 parity.
Q: Can Lido validators be slashed?
A: Yes, but Lido diversifies risk across 9 professional nodes and maintains an insurance fund.
Q: What’s Lido’s plan for full decentralization?
A: Transitioning to permissionless node operators and SSV (Secret Shared Validators) technology.
👉 Explore Lido’s stETH integration with DeFi
👉 ETH 2.0 staking rewards calculator