Lido DAO (LDO)

Lido DAO (LDO) is the governance token of Lido, the largest liquid staking protocol on Ethereum. LDO holders vote on how Lido is run: which node operators may run validators, what fees the protocol charges, how its treasury is spent and which upgrades are adopted. Lido itself lets anyone stake ETH in any amount and receive stETH, a token that tracks the staked ETH and its rewards.

LDO and stETH are different tokens. stETH represents staked ETH and earns rewards; LDO earns nothing directly and carries votes. Lido is governed by a decentralized autonomous organization, the Lido DAO, but since 2025 stETH holders have also had a way to delay or block its decisions. Rival staking services include ether.fi on Ethereum and Jito on Solana.

Running an Ethereum validator yourself needs 32 ETH, a computer that stays online and some technical skill. Lido works like a cooperative that does this on members' behalf. You hand over any amount of ETH, professional operators run the machines, and you receive stETH, a receipt that grows each day as rewards come in. You can trade or lend the receipt whenever you like, instead of waiting in line to withdraw.

LDO is the cooperative's voting card. Its owners decide who runs the machines and how big a cut the cooperative takes. Because the cooperative has grown so large, many people worry about how much of Ethereum it controls, which is why stakers were later given a way to push back against the voting-card holders.

Lido launched in December 2020, shortly after Ethereum began accepting staking deposits, when staked ETH could not yet be withdrawn. stETH filled that gap and quickly became a widely used form of collateral in decentralized finance, including on lending markets such as Aave. In June 2022, as crypto lenders failed, stETH traded at a discount to ETH because holders could not redeem it, which deepened the losses of firms that had borrowed against it.

Lido V2, in May 2023, added direct withdrawals once Ethereum allowed them. The protocol closed its versions on Solana and Polygon to focus on Ethereum. A Community Staking Module opened in October 2024 so that smaller node operators could join with a bond. Lido V3, live on mainnet from January 2026, introduced stVaults, which let institutions and other stakers choose their own operators and settings while still minting stETH.

stETH is a rebasing token: holders' balances increase daily as the protocol reports rewards from its validators. A wrapped version, wstETH, keeps a fixed balance and rises in value instead, which suits applications that cannot handle changing balances; see wrapped tokens. Lido takes 10 percent of staking rewards, split between node operators and the DAO treasury, so stakers keep the rest:

• $\text{Gross reward}$ is what the validators earn on the staked ETH.
• $f$ is Lido's protocol fee, 10 percent or 0.10.
• $\text{Staker reward}$ is the amount added to stETH holders' balances.

For example, if 1,000 ETH earns a gross 3 percent in a year, the validators earn 30 ETH and $30 \times (1 - 0.10) = 27$, so stakers receive 27 ETH and Lido's operators and treasury share 3 ETH.

LDO has a fixed supply of 1 billion tokens, created at launch and distributed among the DAO treasury, early investors, the founding team and other contributors. Holders vote on proposals on-chain, and voting power follows token balances, so large holders carry most of the weight in Lido's governance.

To answer the criticism that LDO holders alone could change rules affecting all stakers, the DAO approved dual governance in June 2025, and it went live in July. stETH holders who object to a proposal can lock their tokens in an escrow contract. If locked stETH reaches 1 percent of the total, the proposal is delayed; at 10 percent the protocol enters a "rage quit" state that lets objecting stakers withdraw before any change takes effect.

• Concentration. Lido has at times held close to a third of all staked ETH, a level at which a single operator group could in principle disrupt Ethereum's proof of stake finality. In 2022 LDO holders voted overwhelmingly against capping Lido's own share. By mid-2025 the share had fallen to about a quarter.
• Token power. Critics say LDO's value depends on control rather than cash flow, and that its holders' interests may differ from stakers' interests.
• Smart-contract and depeg risk. A bug, operator failure or market panic could push stETH below the value of the ETH behind it, as in 2022.
• Regulation. In August 2025 staff at the US Securities and Exchange Commission said liquid staking receipt tokens generally are not securities when the provider's role is administrative. The view is staff guidance and depends on the facts of each arrangement.

Holders who prefer to stay outside any pool can use solo staking or other staking pools instead.

• Lido
• Lido documentation
• Faisal Khan: What is Lido DAO (LDO)?