Staking giant Lido looks to bring services to Solana
One of the largest ETH 2.0 and Terra staking services is now looking to expand to other proof-of-stake chains, starting with upstart layer 1 Solana.
In a proposal today on Lido’s governance forums, crypto infrastructure provider Chorus One laid out a plan to build “a liquid staking token (for now: stSOL) that will accrue staking rewards and represent staking positions with Lido validators on Solana,” similar to Lido’s current interest-accruing stETH token.
Development funding to bring Lido’s services to an additional chain would come from the Lido Ecosystem Grants Organization, a program Lido’s governance kicked off in March. Chorus One’s requested a compensation package including 2,000,000 vested LDO tokens and a revenue-sharing model that would entitle Chorus One to 20% of the revenue from protocol fees that would go to the Lido treasury.
The milestones for Chorus One’s vesting unlocks are notably ambitious, including a 1 year cliff to “capture 2.5% of the staked SOL supply,” as well as 1,000,000 tokens scheduled to begin a one year vesting schedule “when Lido for Solana manages to capture 25% of the staked SOL supply.” The proposal notes that Chorus One is currently the largest SOL staker with $600 million in tokens.
A representative for Lido told Cointelegraph that an expansion could be a boon for the protocol’s income.
“For the Lido DAO, an expansion to liquid staking on Solana could bring with it a similar protocol fee set-up as we’re currently seeing with stETH/liquid staking on Ethereum, whereby a 10% fee on staking rewards is collected and split between node operators and the Lido DAO treasury (e.g. to grow an insurance fund),” they said.
They also noted that the door remains open to expanding to other Proof of Stake chains.
“Lido has a very simple mission – keep Ethereum staking simple, secure and decentralised – and we will look to extend this to other networks where possible,” they said.
Per Lido’s website, the services currently accounts for 256,964 ETH staked (worth over $700 billion) across nearly 5000 addresses earning 7.1% APY, and is the third-largest staking pool currently live per Nansen. While estimates vary, once ETH 2.0 launches, the APY rewards are expected to increase significantly.
Lido’s $LDO token has been on a tear as of late, rising 54% on a 24 hour basis to $2.9 and 216% on the week — a run possibly fueled by another governance proposal that would diversify a portion of the treasury to a group of notable venture capital funds, including Delphi Digital, Digital Currency Group, Three Arrows Capital, and Alameda Research.