• Lido is a liquid staking protocol that allows users to stake their Ethereum (ETH) tokens on the Ethereum 2.0 Beacon chain and receive staked Ethereum (stETH) tokens in return. stETH represents the user's share of the staked ETH pool and accrues rewards from validator fees and block rewards.
• Lido aims to solve the problems of illiquidity, opportunity cost, and complexity associated with Ethereum 2.0 staking, by enabling users to use their stETH tokens across various decentralized finance (DeFi) applications and platforms, such as lending, borrowing, trading, and providing liquidity.
• On May 15 with a protocol upgrade to V2., Lido enabled withdrawals of ETH in the form of stETH, allowing users to redeem their stETH tokens for the underlying ETH at any time. This feature was highly anticipated by the community and marked a significant milestone for Lido and the Ethereum staking ecosystem.
• The stETH redemption feature attracted significant attention and led to an impressive rush of stETH redemptions, with $500,000 worth of stETH redeemed in just three hours. This event demonstrated the high demand for liquid staking solutions and the value proposition of Lido as a leading protocol in this space.

Lido is a liquid staking protocol that allows users to stake their tokens on various proof-of-stake networks and receive transferable staked tokens (such as stETH, stMATIC, stSOL, etc.) in return. These staked tokens represent the user's share of the staked pool and can be used in various DeFi applications to earn additional rewards or borrow against. Lido also distributes its own governance token, LDO, to stakers and liquidity providers.

Lido plays an important role in the decentralized finance (DeFi) ecosystem by enabling users to participate in staking without locking their tokens or giving up their liquidity. This way, users can benefit from both the security and rewards of staking and the composability and innovation of DeFi. Lido also supports network decentralization by allowing users to choose from a diverse set of node operators that run the validators on behalf of Lido.

One of the key features of Lido is the StETH redemption feature, which allows users to redeem their stETH tokens for ETH at any time, regardless of the lockup period imposed by the Ethereum network. This feature is enabled by a smart contract that acts as a buffer between the staked ETH and the stETH supply, and uses a combination of rebasing, fees, and slashing insurance to ensure that the redemption ratio is always 1:1. The StETH redemption feature is significant because it removes the opportunity cost of staking ETH on Ethereum 2.0, which otherwise would require users to wait until the merge or use third-party services to exit their stake. By providing instant liquidity and flexibility for stakers, Lido makes Ethereum staking more accessible and attractive for a wider range of users.

The difference between stETH and ETH is that stETH is a liquid staking token that represents an equivalent amount of ETH that has been staked on the Lido protocol. ETH is the native cryptocurrency of the Ethereum network that can be used for transactions, smart contracts, and staking.

When you stake ETH on Lido, you receive stETH in return at a 1:1 ratio. This means that for every ETH you stake, you get one stETH. The stETH token tracks the value of your staked ETH and the staking rewards you earn. You can also use your stETH in various DeFi applications to earn additional income or borrow against.

The advantage of stETH over ETH is that it gives you liquidity and flexibility while staking. You can trade, transfer, or exchange your stETH at any time, without waiting for the lockup period or exit queue imposed by the Ethereum network. You can also redeem your stETH for ETH at any time using the StETH redemption feature.

The disadvantage of stETH over ETH is that it involves additional risks and fees compared to staking directly on Ethereum. For example, you have to trust the Lido protocol and its node operators to secure your staked ETH and distribute rewards correctly. You also have to pay a 10% fee on your staking rewards to Lido and its node operators. Additionally, you may face price fluctuations or slippage when trading or redeeming your stETH tokens.