Lido

Lido is an open-source liquid staking protocol for Ethereum, launched in 2020, that allows users to stake ETH through a non-custodial pooling mechanism without locking funds or running a validator node. When a user deposits ETH through Lido, they receive stETH — an ERC-20 rebasing token that represents their staked ETH position and reflects accumulated consensus layer staking rewards through daily balance updates. Lido enables staking participation for users who hold any amount of ETH, as the protocol aggregates deposits across multiple validator slots operated by a governed set of professional node operators

Lido operates under the governance of the Lido DAO, where LDO token holders vote on protocol parameters including the validator operator set, fee structures, and smart contract upgrades. The protocol is maintained as open-source software with contracts and documentation publicly available on GitHub under the lidofinance organization. Smart contract audits are collected and published in a dedicated repository at github.com/lidofinance/audits for independent review by the community and security researchers

The primary user interaction with Lido begins at lido.fi, where users connect an Ethereum wallet and deposit ETH into the protocol. Upon deposit, the user receives stETH at a 1:1 ratio, with the stETH balance subsequently updating daily to reflect the portion of consensus layer staking rewards attributable to their staked position. The stETH token accumulates rewards through balance rebasing rather than through a separate claim transaction — each holder's stETH balance increases proportionally as the protocol accumulates Ethereum staking yield from the Beacon Chain

Unlike directly staked ETH, which is subject to Ethereum's withdrawal queue and exit conditions, stETH is a transferable ERC-20 token that can be moved, traded, and used within DeFi applications that support it. This liquidity property is the defining characteristic of Lido's liquid staking model, allowing users to maintain exposure to Ethereum staking yield while retaining the ability to deploy, trade, or use their staked position as an input to other on-chain protocols. The Lido interface displays a user's deposited ETH, current stETH balance, and an overview of the current exchange rate and daily reward accrual

Lido's stETH token is implemented as a rebasing ERC-20 token, meaning the token supply adjusts daily rather than the price per token changing. When Ethereum consensus layer staking rewards are distributed, each stETH holder's balance increases proportionally to their share of the staked pool without any action required by the holder. This rebasing mechanism means that stETH balances grow over time purely from Ethereum network staking rewards, at a rate determined by the current Beacon Chain reward rate and the total amount of ETH staked through the protocol

ETH deposited through Lido is routed to Ethereum validator slots operated by a curated set of professional node operators approved through Lido DAO governance. Each operator runs Ethereum consensus layer validators on behalf of the protocol, with performance monitored by the DAO and the community. This multi-operator structure distributes validator operation across multiple independent entities, reducing the operational risk that would arise from relying on a single node operator for the entire pooled staking position. Node operator additions, removals, and performance requirements are subject to LDO governance votes

stETH's ERC-20 standard implementation makes it usable as an input to DeFi protocols that support rebasing tokens, or wstETH — a wrapped version of stETH that maintains a static balance and instead increases in value over time, offering compatibility with protocols that do not support rebasing mechanics. Both stETH and wstETH can be used as collateral in lending protocols, supplied to liquidity pools on decentralized exchanges, or incorporated into yield strategies, extending the utility of staked ETH positions beyond passive reward accumulation. The choice between stETH and wstETH depends on the specific integration requirements of the target DeFi protocol

Lido DAO governance is conducted through LDO token voting, where holders submit and vote on proposals covering protocol upgrades, validator operator set changes, fee parameter adjustments, and treasury allocations. Proposals pass through a defined governance process that includes community discussion before formal on-chain votes are cast, with results executed through the DAO governance contracts. The research forum at research.lido.fi serves as the primary venue for technical discussion and governance proposal development before formal on-chain voting begins, providing a transparent record of the reasoning behind protocol decisions

Lido serves a range of Ethereum staking and DeFi use cases: ETH holders who want to earn Ethereum consensus layer staking rewards without running a validator node use Lido to stake any amount of ETH and receive stETH representing the position; DeFi users deploy stETH as collateral in lending protocols to borrow against their staked ETH exposure without unstaking; liquidity providers supply stETH or wstETH to decentralized exchange liquidity pools to earn trading fees alongside staking rewards; yield strategy operators incorporate stETH into automated strategies that compound staking yield with other DeFi yield sources; and LDO token holders participate in Lido DAO governance to influence validator operator selection, protocol upgrade decisions, and fee structures

Developer integration with Lido is supported through the protocol documentation at docs.lido.fi and the open-source smart contract repositories available on GitHub under the lidofinance organization. The Lido contracts expose interfaces for ETH submission and stETH minting, allowing protocols and applications to integrate Lido staking programmatically through on-chain contract calls rather than requiring user interaction with the Lido interface directly. The wstETH wrapper contract provides a non-rebasing interface for DeFi integrations where a static ERC-20 balance is required — this is particularly relevant for lending protocol collateral adapters and constant-product liquidity pool integrations that cannot accommodate the rebasing mechanics of stETH

Lido publishes smart contract audit reports in a dedicated repository at github.com/lidofinance/audits, providing transparent access to the security review history across protocol versions and contract upgrades. The full smart contract codebase is publicly available under the lidofinance GitHub organization for independent review, and protocol documentation at docs.lido.fi covers the architecture, validator operator model, and governance structure of the protocol. As a non-custodial protocol, Lido does not hold user keys — deposited ETH is transferred to the Ethereum Beacon Chain staking contract through the Lido protocol, with stETH representing the user's claim on the staked position. Users should review the available audit documentation and assess the smart contract and validator operator risks appropriate to their staking exposure level

Lido provides a liquid staking solution for Ethereum that converts staked ETH into the tradable ERC-20 stETH token, enabling users to maintain staking exposure without locking funds or managing validator infrastructure. The open-source protocol, published audit repository, DAO governance through LDO, and broad DeFi integration support through both stETH and wstETH make Lido a well-documented liquid staking option for Ethereum participants. Users and developers evaluating Lido should review the documentation at docs.lido.fi, the audits repository at github.com/lidofinance/audits, and the research forum at research.lido.fi to understand the protocol's validator model, governance structure, and smart contract security posture before staking or integrating