Lido Token Jumps 24% as Staked Ethereum Slowly Repegs

Lidos native token LDO has skyrocketed by more than 24% in the last 24 hours, hitting a weekly-high of $0.66 cents.

Meanwhile, Lidos Staked Ethereum token, called stETH, appears to have grown in value with Ethereum. Both rose a little over 5% overnight with the staked version trading at $1,091 and Ethereum trading at $1,127.

The current gap between Ethereum and stETH does, however, still represent a discrepancy of roughly 3% for Lidos staked token.

While this is significant, at the height of its de-peg last month, stETH fell 6% short of the mark, according to a report by blockchain analytics company Nansen.

Lidos surging LDO token is for protocol governance, enabling holders to help manage fees and token distribution, approve and remove Lido node operators and vote on governance proposals in the Lido DAO.

Lido: an Ethereum staking solution

Anyone can become an Ethereum 2.0 validator, provided they have 32 Ethereum to lock up to activate the software and earn rewards for storing data, processing transactions, and adding blocks to Ethereum.

For those lacking those funds, though, Lido offers another option.

Lido is a staking pool that allows people to stake any amount of their ETH through smart contractsautomated self-executing financial contracts. Users earn yields in stETH, which currently cannot be redeemed 1:1 for Ethereum, though after the merge it will be. It can also be lent, staked and traded for other tokens.

Staked Ethereum is issued by Lido to represent Ethereum that has been locked up in Ethereums Beacon Chaina network that in August will be merged with Ethereums mainnet in an upgrade that will transition the entire network to a proof-of-stake consensus mechanism and, reportedly, render the network 99.95% more energy-efficient.

Lido was at the center of controversy last month after crypto lender Celsius froze withdrawals to stop a bank run that could have further depleted the price of stETH. It came to light that Celsius had staked customer funds on Lido and currently holds at least $449 million worth of stETH in a public wallet, according to Nansen.

Lido currently ranks as Ethereums fourth-largest DeFi protocol with a total value locked (TVL) of $4.79 billion. The platform also accounts for the lions share of depositors (31.6%) on the Beacon Chain.

Despite centralization concerns, 99.8% of Lidos DAO voted to keep the protocols Ethereum staking capacity uncapped.

Lidos view is not a popular one, with many, including Ethereums founder Vitalik Buterin, Beacon Chain community manager Superphiz, and Ethereum Foundation researcher Danny Ryan all publicly tweeting that staking dominance would lead to centralization.

In response, Lido insists its staking is not contrary to the ethos of Ethereum, stating that it was formed to prevent centralized exchanges from gaining the lion’s share of staked Ethereum and to keep Ethereum decentralized.

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