In the digital world, all things are getting digitized which includes banking and transaction of the people. We are dealing in physical currency since the transaction system is introduced but nowadays people are getting modern and are dealing in digital modes like wireless transactions through net banking or UPI (Unified Payment Interface). In addition to wireless transactions, people are nowadays attracted to the decentralized form of currency known as cryptocurrency and also the decentralized form of the banking system because in cryptocurrency transactions there is no involvement of third-party organizations or central governing bodies. Lots of people stake their crypto assets for a fixed time to get better returns. Liquid staking is very important to allow the user to use their staked assets as collateral or lend those assets. If you cannot purchase an entire Bitcoin, buying a single unit or fraction via a reliable platform like this Website amplifies the transaction volume and feasibility.
What is Lido DAO?
Lido DAO is one of the best liquid staking protocols out in the world which is user-friendly and provides the best returns. It works on the blockchain of Ethereum. Lido DAO allows the user to use their locked assets in other protocols like collateral. This liquefies the assets of the user which are already staked and lets the user gain more returns on these assets. It is attracting more and more users because of its special features.
What is Liquid Staking?
One of the secured protocols for liquid staking which is used in the different layers of the crypto using the consensus mechanism of Proof of Stake (POS) is the Lido DAO. Liquidity is very important in dealing with the POS staking system. Illiquidity is the main problem in the staking ecosystem which fails in the staking system.
The main problem of the Defi protocol is that once the user deposits or stakes the assets belonging to them in this protocol then they have to wait for the staking period to get over to get good returns on their assets or tokens that they have staked. This thing makes people choose the best platforms which can give the best return to the user on their assets and Lido DAO is one of them giving the best returns to the user on their staked assets or tokens.
Lido DAO Tokens
The liquid staking protocol Lido is based on the working structure of the Decentralized Autonomous Organization which is governed and run by a community of members who work for a better future for the crypto world. The Lido tokens abbreviated as LDO are the type of votes which are used by the members of the DAO community to plan the future of the organization or to make some changes in the Decentralized Autonomous Organization. Some of the big names in the crypto world like P2P capital, KR1, etc are members of the community.
Working on the Lido DAO platform
The working of the Lido DAO platforms is generally around three stages. The user has to follow these steps and the work is done.
The three stages of the working procedure of the platform are:
- Use of the liquid asset (sETH)
In the first stage, the user is needed to stake the amount of Ethereum it wants on the platform then the user can opt for the derivative token of the Lido DAO or liquid assets of the staked Ethereum which is known as the sETH. The final stage allows the user to use the staked Ethereum in other Defi protocols which makes various investment opportunities for the user. Unlike the traditional staking system it allows the user to stake any amount of Ethereum they want to. The only cons of the platform are that it is only available for Ethereum and the fees for the investors are very high.