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How to pronounce lido in English?

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did you know that a third of all the eth
being staked on ethereum's beacon chain
is coming from a single protocol
this protocol is lido finance and though
there have been many concerns about its
massive stake there's much more to this
crypto project than meets the eye
today i'm going to tell you everything
you need to know about lido finance and
why it could have huge implications for
not just ethereum but potentially every
proof-of-stake cryptocurrency
on the market
[Music]
before we talk about staking there's a
disclaimer that needs displaying i'm not
a financial advisor and no i'm not
playing this video is intended to be
educational and entertaining please
contact a financial advisor if your
portfolio has your heart racing
if this is the first time we meet up my
name is guy and i am a crypto buff
that's because i create high quality
crypto content full of facts and not
fluff
coins tokens news reviews you know that
kind of stuff
if you find crypto tough subscribing to
the channel and pinging that
notification bell will be enough
so now that i've made sure i won't get
cuffed let's see what lido finance is
about and why it's so loved
lido finance was founded in october 2020
by constantine lamarchuk vasily
shapovalov and jordan fish
constantine holds a doctorate degree in
finance and has worked in crypto since
2015 most notably as the founder of p2p
validator a company that runs validator
nodes on various proof-of-stake
blockchains
constantin bought his first bitcoin in
2014 participated in the ethereum ico
later that year and has apparently never
sold his btc eth nor any of the other
cryptocurrencies he's purchased since
then
as a result of these diamond hands
constantine estimates he is up between
10 000 and 50 000 x on his crypto
portfolio and he says his secret is to
focus on projects with visionary
founders
take note
vasily shapovalov holds a bachelor's
degree in mathematics and spent nearly a
decade working as a software engineer
before switching to crypto in 2019
in 2020 vaseline became the chief
technology officer of p2p validator and
one of his first tasks was to build a
third-party staking solution for
ethereum's upcoming beacon chain
this third-party staking solution
eventually became lido finance and
vassily continues to serve as the
project's de facto technical lead
now while the name jordan fish might not
sound all that familiar if you're into
crypto and active on twitter you
probably follow him without even knowing
that's because jordan is kobe formerly
crypto cobain a popular crypto
influencer podcaster and writer with
close on 700 000 twitter followers and
counting
his sub stack is also well worth
checking out too
jordan has been in crypto since 2012 and
in a recent four hour long interview he
explained that he invested 500 into
bitcoin at the beginning and basically
hasn't invested since it's all been
recycled games
nice
jordan holds a bachelor's in computer
science and crypto was a side hustle for
most of his career which he spent
working mostly in marketing namely for
monzo bank one of the first online banks
here in the uk
interestingly jordan was briefly the ceo
of p2p validator and he insists that he
was the quote sprinkle on top for lido
finance with konstantin and vasily being
the quote brains of the operation
even so jordan is the author of the
medium post announcing lido finance in
october 2020 and it seems his role was
to attract attention and investors to
the project when it was first getting
started
jordan left lido finance in early 2021
presumably to focus on the aptly titled
crypto podcast up only which began in
february 2021 and which he co-hosts with
brian krosgaard aka ledger again highly
recommended
now according to crunchbase and the
privacy policy on the lido finance
website the protocol itself was built by
a software company registered in the
cayman islands called defy limited
though lido finance has since become a
decentralized autonomous organization
with no single entity behind it
so what exactly is lido finance and how
does it work
well lidar finance is a liquid staking
protocol in plain english it lets you
stake proof-of-stake cryptocurrencies
without having to lock them up meaning
you can trade them freely while still
staking the short explanation of how
this works is that when you stake your
cryptocurrency through lido finance the
protocol gives you a tradable token that
acts as a sort of receipt for the crypto
you staked
so in the case of ethereum when you
stake eth on the beacon chain through
lido finance the protocol gives you a
token called staked eth or st eth which
mirrors the price of eth and can be
freely traded
now st eth maintains its price peg in
three ways the first is through
arbitrage wherein rational traders buy
st eth when it drops below the price of
eth since it can be redeemed for actual
eath in the future
the second way st eth maintains its peg
is through liquidity mining wherein the
lido dow provides additional rewards to
anyone providing liquidity for trading
pairs between eth and st
the third way st eth maintains its peg
is through the organic demand for st eth
since st eath earns staking rewards in
real time it's the ideal collateral for
borrowing protocols like arve and make a
dao
however the fact that st eth earns
staking rewards in real time means its
value changes and this makes it
incompatible with certain d5 protocols
namely decentralized exchanges like
uniswap
this is why there's a second st eth
token called wrapped st eth or wst eth
which essentially makes it possible for
your st eth to continue increasing in
value while maintaining a fixed price
for dex trading
besides ethereum's beacon chain lido
finance currently supports solana kusama
and polygon it's also in the process of
adding support for polka dot
now as i mentioned in the introduction
lido finance is staking around a third
of all the eth on ethereum's beacon
chain an amount that's worth well over
eight billion dollars
this is for a few reasons
first becoming a validator on ethereum's
beacon chain requires 32 eth which most
people can't afford and delegation is
technically not possible
second becoming a validator on
ethereum's beacon chain requires
technical knowledge as well as 24 7
monitoring because validators risk
losing some of their eth if they go
offline or fail to upgrade on time
and third becoming a validator on
ethereum's beacon chain requires locking
up the aforementioned eth until ethereum
completes its transition from proof of
work to proof of stake
even then withdrawals of staked eth may
not be allowed right away and in a
recent interview ethereum enthusiast
anthony sasano revealed validators may
be stuck waiting for six months
it should come as no surprise then that
so much eath is being staked in a liquid
way and why the demand for liquid
staking is much higher for ethereum
compared to other proof-of-stake cryptos
if you're wondering why everyone is
flocking to lido finance for liquid
staking as opposed to say centralized
exchanges it all has to do with
convenience and security
for starters liquid staking on lido
finance doesn't require kyc and the
protocol is therefore accessible to
anyone with an internet connection save
for a few exceptions more about that
later
when you stake eth through lido finance
a set of audited smart contracts
automatically distributes this eth to a
set of 22 validators on ethereum's
beacon chain that were vetted by the
lydo dao
now it's important to note that the
leido community is actively onboarding
new beacon chain validators
this is why lido finance having a third
of all the eth staked isn't necessarily
a cause for concern
as a reward for sharing their staking
infrastructure these beacon chain
validators earn five percent of the
staking rewards from all the eth that's
being delegated to them by lido finance
another five percent of the staking
rewards go to the lido dow treasury
which can be used for grants for new
lido finance deployments or even
protocol insurance if a lido finance
affiliated validator is slashed
the remaining 90 goes to st holders
hence why staking rewards for eth on
lido finance are four percent versus the
4.4 percent that you get if you stake
directly on the beacon chain
on that note you can find out what the
top staking cryptocurrencies for 2022
are by using the link in the description
i digress
lido finance officially launched after
the establishment of ethereum's beacon
chain in december 2020 and the following
january the ldo token was officially
introduced
ldo is an erc20 token on the ethereum
blockchain with a maximum supply of 1
billion the entirety of which was minted
at genesis
ldo's use cases are currently limited to
voting in the leido dow
now as per the blog post announcing the
ldo token around 36 of its supply went
to the lydo diode treasury around 22
percent went to investors 6.5 percent
went to early validators and signature
holders more about them later
20 went to the early developers of lido
finance and 15 went to the founders and
future employees
as per an article about the ldo token on
lido finance's website quote initial
contributors to lido have a one year
lock followed by a one year vesting
period
the one year lock ends in december 2021
logically this means ldo tokens will
finish vesting in december this year
save for those belonging to the lido dow
treasury as their remission schedule is
determined by community vote
in terms of investors lido finance has
seen three funding rounds so far
according to masari the first funding
round was in december 2020 and it raised
two million dollars from various crypto
vcs as well as prolific crypto
personalities such as the founders of
arve and synthetics
the second funding round for lydo
finance took place in march this year
and it raised 70 million dollars all of
which apparently came from crypto vc and
recent horowitz
the third funding round for lido finance
took place earlier this month and it
raised around 73 million dollars from
various crypto vcs 50 million of which
came from paradigm
this third funding round involved crypto
vcs buying ldo tokens directly from the
lydo dow treasury in exchange for around
21 000 eth a purchase proposal that was
approved via governance by the lido
community
as per the proposal all ldo tokens sold
to vcs in the third funding round come
with a one-year lock-up followed by a
one-year vesting cliff just like the
original distribution albeit on a later
schedule
it's not clear whether andreessen
horowitz acquired any ldo as part of its
investment nor whether there's a vesting
schedule involved
a quick trip to etherscan reveals that
the current distribution of ldo is
fairly concentrated in the largest
wallets though most of these are smart
contracts presumably the vesting
contracts for lido finance's more recent
investors
what's concerning is that there are only
around 15 000 ldo holders on ethereum
though i imagine there are many more
holding their ldo on centralized
exchanges
the distribution of st eth and wste is
likewise concentrated in the largest
wallets though almost all of them are
smart contracts related to d5 protocols
what's awesome is that there are over 75
000 st holders on ethereum and this
number seems to be increasing
this is despite the lack of support for
st eth on centralized exchanges though
perhaps it's a consequence of this fact
best of all both st eth and wste have
done a pretty good job of maintaining
their pegs though the former seems to be
trading slightly below the price of eth
and the latter is trading a bit above
the price of eth
so this brings me to the moment you've
all been waiting for and that's my
analysis of ldo's price action as you
can see ldo's price action has been
pretty dismal not only that but the
trading volume has been limited and ldo
even seems to have had a few speculative
pumps and dumps
the first speculative pump took place
last spring and it happened because lido
finance announced it would be adding
support for solana
the rest of the crypto market was also
rallying at the time
the second speculative pump took place
last summer and it happened because lido
finance released a referral program
offering to share a portion of the eath
stake of whoever you refer to the
protocol
lido finance also added support for
tera's anchor protocol partnered with
the ledger hardware wallet to make it
possible to do liquid staking using a
cold wallet and officially added support
for the solana blockchain
the third speculative pump took place
last winter and it seems to have been
caused by the news that make a dao had
opened its doors to using st eth as
collateral to mint its decentralized
stable coin dye
now ldo's most recent speculative pump
was caused by the announcement that ave
would likewise be opening its doors to
using st eth as collateral
lido finance also added support for the
polygon side chain and of course there
was lots of hype around that 70 million
dollar raise
today ldo is trading almost 50 percent
below its opening price and appears to
be in a long-term downtrend
this might have something to do with the
fact that ldo's circulating supply has
increased from around 10 million to over
310 million over the last year and a bit
assuming an average price of a dollar
which is being generous there's been up
to 300 million dollars of cell pressure
since the ldo token began trading
on the demand side the only real demand
driver seems to be speculation and that
has all but dried up with the advent of
the crypto bear market
this means that ldo could continue to
fall if the crypto bear market continues
and you can find out when it could end
using the link in the description
as always ldo's long-term potential
depends on the upcoming milestones for
lido finance and there seems to be no
shortage of those
first there's the lido finance roadmap
which was detailed in a blog post in
july last year
as the title suggests lido finance's
long-term goal is to make liquid staking
completely trustless meaning there's no
centralized entity involved with
depositing staking or withdrawing
cryptocurrencies on the protocol
leider finance is also obsessed with
making sure ethereum stays as
decentralized as possible and that means
opening its doors to as many beacon
chain validators as possible
while simultaneously making its protocol
more attractive than other
liquid-staking alternatives found on
centralized exchanges
there are only two factors that don't
make lido finance fully trustless and
the first is that all withdrawals from
validators are controlled by a multi-sig
wallet with 11 signatories six of whom
must sign each withdrawal transaction
obviously that's not very trustless nor
practical for the long term
the second factor is the process of
onboarding new validators for lido
finance which you'll recall are vetted
by the lido dao
although this ensures that lido finance
validators are legit it also serves as a
point of trust and simultaneously deters
more decentralization
the authors note that the first factor
will eventually be solved through smart
contracts the same way it was with
protocol deposits but the second factor
will be much more difficult to address
and a series of solutions such as
on-chain and off-chain reputations were
proposed
in a follow-up blog post from april this
year lido finance detailed the
characteristics of a good validator set
and proposed two concrete solutions for
how additional validators can be
onboarded
the first solution is decentralized
validator technology or dvt wherein
validators can work together to sign a
single block
this allows new validators to be
onboarded as part of an existing
validator group which makes it possible
for the protocol to accommodate
manipulation or failure from new
validators
the second solution is node operator
scores or nos's which will create a
reputation for each validator based on a
series of metrics potentially including
ldo stakes which could be slashed
the authors specify that dvt will be
rolled out first and noses will follow
no timelines were provided but i suspect
any timelines will be up to the lydo dao
they also note that they will make it
possible for st eath holders to veto any
decisions made by the leido dao as an
additional layer of protection
the snapshot page for the lydo dow
reveals that there are only three active
proposals the first of which just seems
to be a test question
the second one proposes reducing the
referral fees for ethereum staking and
the third proposes increasing the cost
of making proposals
both proposals are currently passing so
expect to see those implemented soon
on the lydodaof forum there seems to be
quite a bit of discussion about adding
support for avalanche and near protocol
i couldn't help but notice that our
friend kobe aka lido finance co-founder
jordan fish is actively participating in
the discussions along with well-known
ethereum developer tim baco
i also noticed that the lido finance
github has a few code repositories
related to cosmos which could be
foreshadowing support for a third
proof-of-stake cryptocurrency
now if you're unfamiliar with avalanche
near protocol or cosmos you can find out
about all three projects using the links
in the description
now i'd be remiss if i didn't mention
the potential concerns i have about lido
finance my first is potential bugs
lurking in the protocol and that's
mainly because serious bugs in lidar
finances code have been discovered on
two occasions the first bug was
discovered in october last year and it
put over 20 000 eth at risk luckily the
bug was caught and fixed before an
exploit occurred
the second bug was discovered in march
this year and it pertained to many front
ends for the lido finance protocol the
bug was once again caught and fixed
before any exploits occurred
now i'm pretty sure that more bugs will
continue to be discovered and that's
because adjustments to the protocol will
continue as ethereum's transition to
proof of stake continues
this is something that's been mentioned
by the leido finance team and no matter
how competent they are or how many
audits are done there will always be
room for error
this ties into my second concern and
that's the potential issues that could
arise at the other layers of lido
finance specifically the other
blockchains that its liquid state assets
are being bridged to
and its governance process
as some of you will know st eth was one
of the assets being used as collateral
in terra's anchor protocol and when
terror collapsed in mid-may it caused st
eth to lose its peg as traders started
to wonder whether it could be possible
to retrieve all the st stuck on the
terra blockchain
the possibility that people could start
to panic sell st eth for whatever reason
is something that's been mentioned by
the leido finance team as well and in my
mind the risk of that happening will
increase as the protocol continues to
grow along with the balances of st eth
on other blockchains
as for the governance vector if lido
finance continues to grow at the rate
that it has it's quite possible that it
could become the de facto governance
layer of ethereum itself once it
completes its transition to proof of
stake
that's because if one hundred percent of
the eath being staked on the beacon
chain was being done through lido
finance then the lido dow would have an
unbelievable amount of influence over
ethereum itself
now the lido finance team actually
believes this is inevitable due to the
demand for liquid staking
consider that current estimates see the
protocol holding 50 of all staked eth in
just the coming months
i suppose that explains why vcs are so
hungry for ldo despite its poor price
action
this relates to my third concern and
that's regulation it's clear that
regulators aren't fans of any crypto
projects that provide a yield of any
kind particularly d5 protocols
with the staking rewards on ethereum
expected to double after the merge this
could put lido finance and other
liquid-staking protocols on their radar
and it seems lido is already preparing
for this upcoming regulatory storm
that's because an article on the lido
finance website notes that the protocol
is unavailable in some countries due to
quote regulatory uncertainty and though
this list seems to be limited to
countries sanctioned by the united
states and its allies it's a list that
could grow really quickly for other
reasons
it's also hard to have decentralization
and trustlessness as a goal while
simultaneously restricting users from
certain regions
in lido finance's defense these
restrictions are probably occurring at
the infrastructure layer of ethereum
itself
the infrastructure layer is just one of
the many layers in a cryptocurrency's
decentralization and you can learn all
about those using the link in the
description
and that's all for today's video about
lido finance if you found it interesting
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around until the end of the show this
guy has got to go but i will see you
tomorrow
[Music]

did you know that a third of all the eth

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lido::noun | Spocien Dictionary

lido

noun

/'lidoʊ/

a recreational facility including a swimming pool for water sports

Type	Words
Type of	recreation facility, recreational facility

How to pronounce lido in English?

lido::noun | Spocien Dictionary

abandonment

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