Lido, a liquid staking protocol, has officially deployed its Wrapped Staked Ether (wstETH) to Coinbase’s Base network. This move, approved by Lido’s governing body, enables the trading and use of wstETH in decentralized finance (DeFi) applications on the Base network as of November 8, 2023.
Lido’s liquid staking protocol is designed to allow users to stake cryptocurrencies while simultaneously using them in DeFi applications. By issuing a derivative token that can be redeemed for the underlying staked asset, Lido enables users to maintain liquidity while earning staking rewards.
In the case of Ethereum’s native coin, Ether (ETH), Lido issues a derivative token called “Lido staked Ether (stETH),” which exists on the Ethereum network. When stETH is sent to other networks via a bridge, it must be wrapped, creating a double derivative token known as “Wrapped Staked Ether (wstETH).” Before November 8, there was no official version of wstETH on the Base network.
Prior to the official deployment of wstETH on Base, an unofficial version of wstETH was deployed by the Beefy Finance team on October 17, with Kyberswap announcing this deployment. Subsequently, a proposal was put forth for the decentralized autonomous organization (DAO) to take control and accept ownership of this version in order to endorse it as the official wstETH on Base.
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Following the proposal, Lido’s DAO approved the deployment of wstETH to Base on November 2, with 597 million votes in favor and 255 against. The official endorsement of wstETH on Base marks a significant milestone for Lido in scaling wstETH adoption, as it expands the protocol’s network of compatible Layer 2 (L2) bridges and addresses the growing demand for decentralized staking within the broader Ethereum ecosystem. Marin Tvrdić, a contributor to LidoDAO, highlighted the importance of bridging the gap between scalability limitations and the increasing demand for decentralized staking.
It is worth noting that not all versions of wstETH have been endorsed as official by LidoDAO. For instance, LayerZero launched a version of wstETH for Avalanche, BNB Chain, and Scroll that drew criticism from multiple protocols for allegedly being “proprietary.” This version is still under debate by the DAO, and no vote has been held on it thus far.
As Lido continues to expand its reach and increase compatibility with various networks and protocols, the deployment of wstETH to Base signifies the protocol’s commitment to providing users with greater flexibility and accessibility in utilizing staked assets within the DeFi space. With the official endorsement of wstETH on Base, Lido aims to further its mission of democratizing access to staking by catering to the evolving needs of the DeFi ecosystem. This deployment aligns with Lido’s vision of enabling seamless interoperability and liquidity for staked assets across different networks.
