Lido launches wstETH On Polygon ahead of Ethereum Goerli Testnet Upgrade!
In today's top defi news, users are now enabled to bridge Lido's Wrapped Staked Ether (wstETH) onto the Polygon network, which also happens to be one of the most popular Ethereum based layer-2 scaling solutions out there.
13 MAR 2023, 3 min read
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Lido, which is the largest decentralized finance (DeFi) protocol by total-value-locked (TVL) in the sector, was launched on the Polygon Network late last week. With this launch users are now enabled to bridge Lido's Wrapped Staked Ether (wstETH) onto the Polygon network, which also happens to be one of the most popular Ethereum based layer-2 scaling solutions out there. Polygon is the fifth-largest smart contract network with a TVL in DeFi of $1.03 billion, according to data sourced from DefiLlama, as of writing.

Well-known DeFi protocols like Kyber, Balancer, and Beefy Finance will also offer liquidity incentives for wstETH markets on Polygon.

Lido mentioned that it chose to launch on Polygon due to the volume of its native DeFi activity, track record for security, and the presence of the existing Lido partners on the Polygon network.

This deployment of Lido on the Polygon network marks its third deployment on an Ethereum scaling solution following its launch on Optimism and Arbitrum back in October 2020. Apart from Ethereum and its L2s, Lido is also live on Solana, Moonbeam, Moonriver, and Terra Classic blockchains.

Lido is a Liquid Staking Monopoly

Lido, as mentioned earlier is the largest DeFi protocol in the market right now, especially with the growth in attention that Ethereum is getting ahead of the highly anticipated Ethereum Shanghai Upgrade, which is going to enable "unstaking" of ETH tokens from the ETH 2.0 deposit contract.

Lido is working in the liquid staking sector, where it enables retail traders to be a part of this initiative to secure the Ethereum network even if they don't have the stipulated 32 ETH to contribute and become a validator node on the network. Lido also adds a cherry on the pie by making it highly liquid and enabling users to pull their funds out by selling their stETH or the derivative of the staked ETH, thus making it super easy for retail traders to enter this market.

Thanks to these features, Lido is the largest LSD (liquid staking derivatives) provider, comprising 80% of the entire sector's market capitalization, according to CoinGecko.

Ethereum Shanghai Upgrade

The whole LSD sector has been seeing strong growth, especially in the last couple of weeks as there has been increased interest and attention in the space ahead of the Ethereum Shanghai Upgrade. This Shanghai upgrade, among other things, is essentially going to be a hard fork that will enable staked Ether withdrawals for the first time since it began back in December 2020. And with Ethereum's final testnet deployment on the Ethereum Goerli testnet slated to happen on 14 March, there is bubbling excitement in the space.

Additional read: Ethereum Devs target 14 March for Goerli, postpone mainnet upgrade to April

As of writing, over 16 million ETH tokens are staked on the PoS-based Ethereum Beacon Chain, which is worth well over $26 billion. According to theDefiant.io, the Shanghai upgrade is expected to precipitate a boom in LSD volumes as the activation of withdrawals would incentivize arbitrageurs to step in and minimize the spread between LSD tokens and Ether.

Values as on 13 March 2023.

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