Ethereum DeFi Giant Lido Plans Big Decentralization Push, Here’s How

By Varinder Singh
April 15, 2022 Updated April 15, 2022
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Lido, one of the largest liquidity pools for Ethereum staking, said it plans to further decentralize its platform by lowering the requirements to become a validator.

It will allow anyone to become a validator in Lido, and not just those who have more Ethereum staked. Moreover, it looks to improve its governance, which will provide more power to staked ETH holders to repeal any decision.

Lido Introduces Distributed Validator Technology for Selection

Lido, which has over $17 billion in total value locked (TVL), is the second-largest DeFi platform by TVL. It announced its planned changes in a blog post.

With the transition of Ethereum to a proof-of-stake (PoS) consensus protocol after the Ethereum Merge, validators will earn rewards in transaction fees and yields on the Ethereum staked. Currently, Lido selects its validator set on the Ethereum network through an expanded list of peer-reviewed node operators.

With Lido having more than 80% market share in Ethereum 2.0 staking, the liquid staking pool is looking to reduce the influence of big Ethereum stakers under the new roadmap to improve decentralization. Moreover, Lido will improve its validator sets through a more decentralized and performance-based incentive approach.

In order to have a good set of validators, Lido has proposed reducing the requirement for total staked Ether from 2% to a maximum of 1%. Moreover, validators should be legally or physically unrelated, distributed geographically and jurisdictional, security-focused, and run their own nodes.

Validators under the Distributed Validator Technology will allow untrusted node operators and trusted node operators to work together to reduce the risk of an individual validator underperforming or misbehaving.

Moreover, creating a Node Operator Score will help small validators get incentives to stake allocation based on performance. Lido aims to build a permissionless and risk-free staking platform, which also protects the Ethereum blockchain.

Three Arrows Capital Increases Ether Staking

Singapore-based hedge fund manager Three Arrows Capital has been staking Ether in Lido and Curve liquidity pool as Ethereum’s transition to ETH 2.0 comes near. Three Arrows Capital looks to become a validator on the Ethereum blockchain as it continues to stake about 100,000 ETH in liquidity pools. Moreover, the hedge fund manager has recently become the 10th largest Ethereum whale.

Varinder is a Technical Writer and Editor, Technology Enthusiast, and Analytical Thinker. Fascinated by Disruptive Technologies, he has shared his knowledge about Blockchain, Cryptocurrencies, Artificial Intelligence, and the Internet of Things. He has been associated with the blockchain and cryptocurrency industry for a substantial period and is currently covering all the latest updates and developments in the crypto industry.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.

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