Glossary · L
Lido Finance
The largest DeFi protocol by total value locked as of 2026. Lido provides liquid staking for Ethereum — users deposit ETH and receive stETH (staked ETH) in return, which earns staking rewards while remaining liquid and usable across DeFi protocols.
Last updated
How Lido Finance works in practice
Lido is the largest liquid staking protocol. It stakes deposited ETH across a curated validator set and issues a token representing the staked position plus accrued rewards, so the capital stays usable while it earns.
Worked example
Depositing ETH returns a staking token that can be supplied as collateral elsewhere. It rebases or appreciates depending on the variant, and the protocol takes a commission on rewards before they reach holders.
Figures are illustrative and chosen to be checkable, not live market data.
The mistake that costs people money
Scale is itself a risk. A single provider controlling a large share of network stake is a centralisation concern for the underlying chain, and the token can trade below redemption value when exit queues lengthen.
Learn more
Lido Finance: common questions
- What is Lido Finance?
- The largest DeFi protocol by total value locked as of 2026. Lido provides liquid staking for Ethereum — users deposit ETH and receive stETH (staked ETH) in return, which earns staking rewards while remaining liquid and usable across DeFi protocols.
- How does Lido Finance work in practice?
- Lido is the largest liquid staking protocol. It stakes deposited ETH across a curated validator set and issues a token representing the staked position plus accrued rewards, so the capital stays usable while it earns.
- Can you give an example of Lido Finance?
- Depositing ETH returns a staking token that can be supplied as collateral elsewhere. It rebases or appreciates depending on the variant, and the protocol takes a commission on rewards before they reach holders.
- What do people get wrong about Lido Finance?
- Scale is itself a risk. A single provider controlling a large share of network stake is a centralisation concern for the underlying chain, and the token can trade below redemption value when exit queues lengthen.