Lido sees around 100k increase in staked Ethereum amid SEC scrutiny

Lido reported an increase in Ethereum staked on its platform, despite the U.S. Securities and Exchange Commission (SEC) classifying the company’s staking program as a security in its lawsuit against ConsenSys.

Increasing staked Ethereum

According to a report on July 2, Lido users staked an additional 95,616 ETH between June 24 and July 1, increasing the total amount of assets staked on the platform by 1.26%, reaching $33.48 billion.

During this period, Lido led the way in net Ethereum deposit inflows, surpassing centralized exchanges such as Binance and Gate.io, as well as the fast-growing liquidity re-staking project Ether.fi.

Lido stETH TVL (Source: Lido)

The platform also uncovered significant wrapped staked ETH (wstETH) activity on Layer 2 networks such as Scroll, Base, Arbitrum and Optimism. The total number of assets on these blockchains grew 7.19% to 141,586, with seven-day trading volume reaching $1.23 billion.

However, the annual percentage rate (APR) on staked ETH has decreased slightly, from 0.04% to 2.96%.

Decentralization of nodes

Lido is stepping up its decentralization efforts with the launch of a Community Staking Module (CSM) to facilitate more decentralized Ethereum node operations.

According to authorities documentationThe CSM will integrate a diverse set of node operators, including solo stakers, into the network. The module also allows permissionless participation of node operators.

“The ultimate goal of this module is to enable permissionless participation in Lido by a larger set of Ethereum node operators, empowering solo stakers to participate in the protocol and increasing the total number of independent node operators across the Ethereum network.”

The move would be a clear shift from the previous approach, which required the DAO to approve new node operators before they could be added to the platform. However, the current effort introduces “moderately low margins for node operators” and requires “no secondary token collateral,” which should make solo staking more attractive and accessible to interested validators.

The module is in early deployment mode on the Holesky testnet and is scheduled to move to a permissionless state on July 11, 2024.

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Posted in: Ethereum , Technology

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